Stocks That Increased Dividends Are Outperforming Market
- June 15, 2010
- Dividend Aristocrats, Dividend Investing, Dividend Stocks, Top Dividend Stocks
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Dividends have taken on greater importance with the recent volatility experienced in the markets. The combination of the Gulf oil spill, the European debt crisis and the flash crash in early May, have set investors on edge.
Dividend stocks that can demonstrate that they are generating significant cash flow and are increasing their dividend payments are becoming very popular. Mad Money host Jim Cramer recently highlighted how 5 stocks that increased their dividends have been outperforming the broader stock market.
Hasbro (HAS: 36.59 +2.41%) – increased dividend by 25% in early February
Core Labs (CLB: 121.97 +0.37%) – increased dividend by 20% in mid January
Ross Stores (ROST: 51.86 +0.43%) - increased dividend by 45% in early February
Wynn Resorts (WYNN: 113.59 -0.92%) – initiated a quarterly dividend of $.20 per share last November
Rollins (ROL: 21.30 -0.28%) – increased dividend by 29% in late January
Mr. Cramer combined all 5 stocks into an index, and the dividend stock index has risen 16% compared to the S&P 500’s 3% gain for the same period.
Cramer believes that history may repeat itself again and so he is zeroing in on seven stocks that recently increased their dividend.
Caterpillar (CAT: 112.83 -1.06%) – announced a 5% dividend increase last week
American Eagle (AEO: 13.69 +0.37%) – raised their quarterly dividend by 10% last week
CR Bard (BCR: 92.31 -0.47%) – increased their dividend by 6% in early June
Del Monte (DLM: 0.00 N/A) – hiked their dividend by 80% last week
DuPont Fabros Technology (DFT: 23.36 -4.11%) – increased their dividend by 50%
FedEx (FDX: 94.80 +0.34%) – moved their dividend 12% higher earlier this month
Target (TGT: 52.70 +0.25%) – announced their dividend was jumping 47% last week
Cramer expressed concerns over FedEx, but believes that Wall Street’s estimates are too low. Even at the current growth rate, Cramer believes the stock looks attractive valued.
While Caterpillar’s 5% dividend raise was relatively small, Cramer believes it is a “big deal”. Just a year ago, many investors were speculating whether Caterpillar would even be able to continue their dividend.
Del Monte not only raised its dividend by 80%, but also reported a “monster quarter.” Cramer likes DLM’s exposure to the pet food market and believes the stock is a buy.
Even after Target jumped their dividend by 47%, the stock currently yields below 2%. However, the company posted improving same-store sales in May. Cramer likes the fact that Target is focused on improving existing stores rather than building new ones.
It will be interesting to see if these seven dividend stocks are able to outperform the market this summer.
