Tag Archives: Dividend Aristocrat

Business, Finance, Occupation & Industry

Can Pitney Bowes Remain a Top Dividend Stock?

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By Dan Caplinger, The Motley Fool

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Investors have always been interested in stocks that pay dividends, but lately low interest rates on bonds and other fixed-income investments have made solid dividend payers even more valuable. For years, Pitney Bowes was among the most promising dividend stocks in the market, as one of the few exclusive companies to make the list of Dividend Aristocrats. In order to become a member of this elite group, a company must have raised its dividend payouts to shareholders every single year for at least a quarter-century. Only a few dozen stocks manage to make the cut, and those that do tend to stay there for a long time.

With the company having had to make a massive shift to its business model in recent years in order to adapt to changing industry conditions, Pitney Bowes made many investors extremely nervous about whether it could remain among its Dividend Aristocrat peers. Last year, it finally got taken off the Dividend Aristocrats list, but not because it stopped increasing its payouts. Rather, it failed to meet Standard & Poor’s minimum market capitalization requirement of $3 billion. Let’s take a closer look at Pitney Bowes to see whether it can sustain its long streak of rewarding dividend payouts to investors.

Dividend Stats on Pitney Bowes

 

  

Current Quarterly Dividend Per Share

$0.375

Current Yield

10.1%

Number of Consecutive Years With Dividend Increases

30 years

Payout Ratio

68%

Last Increase

February 2012

Source: Yahoo! Finance. Last increase refers to ex-dividend date.

The latest on Pitney Bowes
Pitney Bowes was once the undisputed giant in the global mail-services industry. With huge market share in sales of its postage meters and other business mailing essentials, it was an integral part of how both large and small businesses reached out to their customers.

Lately, though, the company has realized that the writing was on the wall for its legacy mailing business. As more delivery services went online, upstart Stamps.com and Newell Rubbermaid‘s Endicia took away some of Pitney Bowes‘ dominant position in the industry.

In response, Pitney Bowes has turned to a dramatic restructuring, moving in the direction of broader-based business services, with a focus on business analytics and data management. That’s an extremely crowded industry, but it also has a lot more growth opportunities than its legacy business. With the rise of the Big Data initiative, Pitney Bowes has plenty of room to use assets like its geocoding software to open doors to new customers.

Looking at its most recent dividends, Pitney Bowes has been getting by on just token payout increases for a long time now:

Source: PBI Dividend data by YCharts.

Pitney Bowes has also been finding other uses for its free cash. Just last week, it said that it had accepted about $400 million in tendered notes from bondholders to retire debt due in the next three years. That may …read more
Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Why Walgreen Is a Top Dividend Stock

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By Dan Caplinger, The Motley Fool

Hyundai Emblem

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Investors have always been interested in stocks that pay dividends, but lately, low interest rates on bonds and other fixed-income investments have made solid dividend payers even more valuable. Among the most promising dividend stocks in the market is Walgreen , and one big reason is that it is one of the few exclusive companies to make the list of Dividend Aristocrats. In order to become a member of this elite group, a company must have raised its dividend payouts to shareholders every single year for at least a quarter-century. Only a few dozen stocks manage to make the cut, and those that do tend to stay there for a long time.

Walgreen has had its share of ups and downs over the past year, but things are starting to look up for the drugstore giant. Let’s take a closer look at Walgreen to see whether it can sustain its long streak of rewarding dividend payouts to investors.

Dividend Stats on Walgreen

Current Quarterly Dividend per Share

$0.275

Current Yield

2.3%

Number of Consecutive Years With Dividend Increases

37 years

Payout Ratio

47%

Last Increase

May 2012

Source: Yahoo! Finance. Last increase refers to ex-dividend date.

The latest on Walgreen
Walgreen suffered a lot during 2012, as its dispute with pharmacy benefits manager Express Scripts led to an exodus of customers to rival drugstore chains. Even after Walgreen and Express Scripts came to a resolution, Walgreen has had a tough time bringing those customers back.

Still, companies that manage to raise their dividends for decades all go through their share of challenges. So far, Walgreen has managed to keep its payouts strong:

WAG Dividend data by YCharts.

Moreover, Walgreen has taken some big steps to bolster growth. Its purchase of a 45% stake in Europe’s Alliance Boots drug chain last summer was part of its larger strategy to expand across the globe as it seeks to diversify and take advantage of better growth opportunities abroad. More recently, Walgreen’s move to replace Cardinal Health as its drug distributor in favor of a 10-year agreement with rival AmerisourceBergen will enhance its global distribution capacity, and Walgreen and Alliance will take an equity position in AmerisourceBergen as well to cement the partnership.

When will dividends rise again?
Last year, Walgreen raised its dividend during the spring, so investors should prepare for another increase in the near future. What’s more important in the long run, though, is whether its major strategic moves will lead to a return to stronger growth. If so, then Walgreen should remain a Dividend Aristocrat for a long, long time.

Walgreen’s dispute with Express Scripts shows just how important pharmacy-benefits management has become in a health care landscape dominated by searching for ways to control costs. Find out how Express Scripts is part of the solution by reading our premium research …read more
Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Is This Dow Stock Becoming a Dividend Aristocrat?

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By Anders Bylund, The Motley Fool

HPQ Dividend Chart

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Dividend aristocrats treat their payouts like nuclear safety protocols. One mistake can blow up your reactor — or destroy your share price overnight. So their dividend checks never, ever shrink, and a true aristocrat increases its payouts every year. Income investors love these wealth-building policies, and for good reason: An unweighted portfolio of the 54 S&P 500 Dividend Aristocrats tickers would have returned 225% over the last 10 years, assuming you reinvested every dividend check in more shares.

By comparison, the Dow Jones Industrial Average returned just 116% over the same period, dividend-adjusted and all. The dividend champs are an elite group indeed — only nine of the 30 Dow components current qualify for a spot on the list, the rest having failed to increase dividends for at least 25 years straight. These stocks average 4.2 CAPS stars (out of five), with only two tickers rated “below average” by your fellow investors. It’s a quality group by any measure.

Is this an impostor?
Hewlett-Packard just raised its dividend by 10%. The board approved a modest increase last year as well, not to mention a 50% boost in 2011. Is this another dividend champion or what?

Well, no — not even close. HP might have landed on the Aristocrats list 10 years ago, when the computer industry fired on all cylinders and the company had raised payouts without fail for many years. But then the dot-com bubble popped, and HP‘s payouts got stuck at $0.08 per share for 11 years.

HPQ Dividend data by YCharts.

The recent return to regular dividend increases coincides with a massive share-price drop. The company has lost its way, and investors can feel it. If you feel cynical today, you could call these increases an attempt to buy investor love with higher yields. So far, it’s not working.

That’s not just my own opinion. Strategy failures in recent years made some HP shareholders question the competency of its directors. In this week’s annual shareholder meeting, three directors (including chairman Ray Lane) received only a narrow majority of “yea” votes.

To put that benchmark into context, remember that Walt Disney removed Michael Eisner from the board and then the CEO office after he received a 57% approval rating. That was absolutely the right move, as successor Bob Iger has led the company to fantastic success and a market-crushing 179% shareholder return in nine years on the job.

A similar shareholder-approved house-cleaning seems in order for HP today. Add the ticker to your Foolish watchlist and wait for more news on this.

Let the right one in
Intel also declared another dividend today, steady at $0.225 per share but likely to rise in the following quarter. Why would I expect an increase? Because that’s how the chip giant rolls. Compare and contrast Intel’s serious dividend increases to HP‘s halfhearted attempts:

HPQ Dividend data by <a target=_blank …read more
Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

These Companies Are Raising Their Dividends, But Should You Invest?

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By Caroline Bennett, The Motley Fool

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As your parents might have told you once, when a company loves its shareholders very much, it sometimes offers a periodic dividend to show it. Then, if its financial affairs continue to go well, the company will occasionally boost its payout amount. A few big name companies have recently lifted their dividends by a considerable amount. Here’s one that’s doing everything right and another that looks a little dubious.

A fizzy payout
Ah, the joy of Coca Cola . Few companies could survive a disaster as big in scale as New Coke, but somehow this company did it, and over 25 years later, Coke is still a dominant player on Wall Street. Seeing as it produces the most widely consumed non-alcoholic beverage in the world, this makes perfect sense.

It may not be surprising, but one of the most high-profile companies in the world is also one of the stock market‘s longest-serving Dividend Aristocrats. Coke announced on Feb. 21 that it would raise its quarterly dividend by 10%, extending a streak that has run for half a century. Even as society looks on the dark side of sugary drinks, Coke continues to bring in enormous annual revenues and retain solid profit margins.

Instrumental dividend
Coke might be dependable, but some other companies are offering bigger dividends that might be more volatile. Texas Instruments recently announced a sizable payout increase of 33%. Additionally, the company will be expanding its share buybacks. These are two moves that investors generally love to see from companies, but in the case of Texas Instruments, is it that great of a strategy?

Generally, a buyback and dividend of this magnitude happen when a company is thriving. A boosted dividend indicates that financials are on enough of an upswing that the business will not only stay afloat but grow even further after it issues the changes. Meanwhile, share buybacks solidify morale among investors: The stock increases in value if there are fewer shares available for purchase.

Based on Texas Instruments‘ recent performance, though, returning more capital to shareholders doesn’t entirely make sense. Quarterly revenues have decreased 4% since Dec. 2012, and its annual revenue has dropped 8% since 2009. One potential reason for the dividend is that Texas Instruments has spare change left over after letting go of more than 500 workers and is trying to get investors excited about the company again. It might seem tempting to jump on this train after the news of the dividend, but it’s wiser for your bank account to wait and see how the company fares following these new changes.

Divi-do’s and don’ts
When a company raises its dividend by a large percentage, it may be too tempting to buy. The truly Foolish investor, however, knows how to identify a strong financial structure from a weak one. Coca-Cola is an easy example of a Dividend Aristocrat guaranteed to pay off, but Texas Instruments proves that even if the payout is big, the company …read more
Source: FULL ARTICLE at DailyFinance