Eight companies that just raised their dividends

In the wake of all the recent dividend cut announcements, I’ve heard some market commentators proclaim that “all” dividends are being cut, and that dividend investing is dead (along, of course, with buy-and-hold investing). What these commentators are failing to notice are the many companies that have not only maintained their dividends in the face of this economic turmoil, but raised them.

As a reminder of this, the Dividend Growth Investor has compiled a list of eight such companies that have just raised their stock dividends. That’s enough to get me to take a closer look at these dividend stocks.

Here’s my quick take (the stars represent Dividendinvestor.com’s star ranking system – three stars are five years of consecutive dividend increases, four stars are ten, and five stars are 20):

Colgate-Palmolive (CL: 74.846 +0.34%, yld: 2.60%) (*****) – This maker of personal consumer products may have raised their stock dividend, but that doesn’t necessarily make the stock a good buy. In fact it appears overvalued here at about $58 per share. That said, the company has a fine dividend growth record and I’d start seriously looking to buy the stock if it dropped into the low $40s or below.

Chubb (CB: 56.11 +0.61%, yld: 2.58%) (*****) – The shares of this property/casualty insurer appear to be fairly valued to undervalued by some measures, and overvalued by others. The current stock price (at about $38) is sitting almost exactly at its long-term linear regression trendline after trading above it for several years. An equal move below the long-term uptrend line would bring the stock down to the mid $20s. I would definitely be interested in it at those levels.

Kimberly-Clark Corporation (KMB: 66.05 -0.05%, yld: 3.90%) (*****) – Another maker of personal consumer products, this company too has a commendable record of growing its stock dividend – for 34 consecutive years so far in fact. Currently the shares appear about fairly valued to perhaps slightly undervalued. I’m watching and waiting to see if I can buy it some somewhere in the $30s.

Thomson Reuters (TRI: 36.77 +0.49%, yld: 3.14%) (0 stars) – The shares of this business information services provider appear somewhat neutral to overvalued here at about $23 per share. That and the company’s short dividend history are enough to keep me away.

Westar Energy (WR: 24.19 +1.55%, yld: 5.16%) (0 stars) – Trading at about $16 per share here, the stock of this Kansas-based utility company appears fairly valued by some measures and significantly overvalued by others. Similar to Chubb, above, the stock price is basically sitting on its long-term uptrend line, having come down almost 50% from its 2007 highs. Still, it appears some time spent trading below the uptrend line seems likely in the weeks and months ahead. That and its undistinguished dividend growth history are enough to keep me away.

PG&E Corporation (PCG: 48.30 +1.26%, yld: 3.67%) (0 stars) – Another utility – this one California based – and, it seems, another overvalued stock. The current stock price of about $38 per share calculates to being more than 20% above a conservative fair value calculation. This is also about the same amount the stock is trading above its long-term uptrend line – all of which suggests there could be plenty of downside risk here. And the company’s dividend history doesn’t provide a compelling reason to buy here either. I’m staying away.

PepsiAmericas (PAS: 0.00 N/A, yld: N/A%) (***) – The shares of this soft drinks distributor appear undervalued on a discounted cash flow basis, but overvalued based on comparison with recent historical valuation ratios. I might take another look if it drops from current levels (about $15-$16) closer to $10.

PPL Corporation (PPL: 27.25 +0.59%, yld: 5.15%) (***) – Here we seem to have yet another overvalued utility stock. Trading at about $27 per share, it calculates to being about fairly valued (assuming a high earnings growth rate going forward) to significantly overvalued if a more modest growth rate is assumed. It’s also overvalued based on comparison with recent historical valuation ratios, as well as based on the stock price still being well above its long-term uptrend line (which is currently located down at about $21). I’m staying away.

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Safe dividends are out there, just harder to find
The secret to long-term returns