Three stocks that just took a dividend hike
Dividends Value notes three companies that raised their dividends this week – one of them a financial! Here’s my quick take on the three dividend stocks mentioned (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):
Hatteras Financial (HTS: 29.52 +0.10%, yld: 15.77%) (0 stars) – The shares of this mortgage REIT currently trade at $24 and yield over 17%. The declared quarterly dividend of $1.05 was $0.05 above the previous quarter’s payment. While this company has very little operating history to evaluate, the nature of its business – profiting from the spread between the company’s borrowing costs and rates on mortgage-backed securities – is not one where any sort of consistent dividend growth can be expected. However it and other mREITs, like Annaly Capital Management (NLY), may well be reasonable income investments. I’m not jumping into this sector without further research, especially given the Fed’s recent moves in the Treasury markets.
Pepsi Bottling Group (PBG: 0.00 N/A, yld: N/A%) (***) – This manufacturer and distributor of Pepsi-Cola beverages just hiked its quarterly dividend by 5.9% from $0.17 to $0.18. This is the sixth consecutive year the dividend has been increased. This increase brings the three-year average dividend growth rate to about 18% and the payout ratio to a still comfortable 30%. Currently trading at about $22 and yielding 3%, the shares appear slightly undervalued here by most measures. By all accounts this is a stable, well managed company that appears to have plenty of room to grow its dividend going forward. I own some PBG (purchased last year in my IRA), but if I didn’t I’d probably be looking to buy some below $20.
Raytheon (RTN: 45.61 +0.64%, yld: 3.02%) (0 stars) – This U.S. defense contractor just boosted its quarterly dividend by 10.7% to $0.31 per share. Trading at about $39, the stock currently yields 2.8% and appears somewhat undervalued by most measures. While the company has paid a dividend for many years, it has only been increasing it consistently since 2005. I’m currently short puts on General Dynamics (GD), which pays a higher dividend, but I might get interested in RTN if it revisits the low $30s or lower.
Related posts:
Two companies about to raise their dividends
Eight more companies that just raised their dividends
Eight companies that just raised their dividends
