These are not all dividend hikes.  Some are speculation of higher payouts and some are explanations about changes in dividend rates.  This is a much more expanded week of dividend news compared to what would have been normally expected in a pre-earnings season week that was light on news.

BP Prudhoe Bay Royalty Trust (NYSE: BPT) declared a $2.2668963 for Q1.  This may seem like a drop compared to what looked like a record level of $3.612 at its last distribution.  These payments are always different and sporadic based upon a myriad of factors from operations, to return of capital, to seasonality, and more.  Here was the last few dividends declared as an example: $1.73 Dividend; $1.65 Dividend; $0.992 Dividend; $1.637 Dividend; and $2.937 Dividend….

Tanger Factory Outlet Centers Inc. (NYSE: SKT) boosted its payment this week on an annual dividend to $1.55 per share from $1.53 per share basis.  That is above 3.5% now and we’d note that the Thomson Reuters estimates are much better than the trailing 12 months at $2.66 for December-2010 and $2.81 for December-2011.

Monro Muffler Brake, Inc. (NASDAQ: MNRO) declared a final $0.07 dividend but for the year ahead it has declared that it will begin paying a $0.09 dividend per quarter.

QUALCOMM Inc. (NASDAQ: QCOM) was a bit of a misnomer when it came to a raised dividend.  The $0.19 dividend declared was higher than a year ago.  The problem is that QUALCOMM already raised its dividend and upped its share buyback plan when its stock was in severe trouble as a stabilization factor.  Some aggressive reporting brought up the thought that was a raised dividend, which is not the company trying to pass of re-news.

Paychex, Inc. (NASDAQ: PAYX) came up in a personal conversation this week as to why it did not raise its dividend.  It announced its same $0.31 per share payout.  The reason is simple.  The company is just coming off the worst employment cycle in a generation and consensus analyst targets from Thomson Reuters are May-2010 at $1.34 EPS and May-2011 at $1.43 EPS.  The dividend coverage ratio here is just still too close.  It raised the dividend a penny in 2008 but the big hike came in 2007 when the dividend went from $0.21 to $0.30.  While everyone likes to see dividend hikes, some patience is needed here before a hike should be demanded.  In fact, investors may feel lucky that it did not do the dividend cut seen elsewhere.

• BP Prudhoe Bay Royalty (BPT) Cut to Sell at Citigroup.
• British Sky Broadcast (BSY) Cut to Neutral at UBS.
• DELL (DELL) Cut to Underweight at JPMorgan.
• Entergy (ETR) Cut to Neutral at JPMorgan.
• Harvest Energy Trust (HTE) Cut to Sell at Citigroup.
• Infineon (IFX) Cut to Underweight at JPMorgan.
• Novellus Systems (NVLS) Cut to Neutral at Bank of America-Merrill Lynch.
• Philip Morris International (PM) Cut to Neutral at Credit Suisse.
• Power Integrations (POWI) Cut to Neutral at Piper Jaffray.
• Sabine Royalty Trust (SBR) Cut to Sell at Citigroup.
• Textron (TXT) Cut to Neutral at JPMorgan.
• THQ Inc. (THQI) Cut to Neutral at Piper Jaffray.

Jon C. Ogg
February 5, 2009