Taking Dividends to the Dollar Stores (FDO, DLTR, DG)

Family Dollar Stores, Inc. (NYSE: FDO) is showing just how a secular trend is still going to rule the roost in retail.  It was Dollar Tree, Inc. (NASDAQ: DLTR) hitting new all-time highs yesterday, and now it is Family Dollar’s day to shine (not at all-time highs).

The news is that Family Dollar is hiking its dividend to $0.21 from $0.18 per share per quarter.  The gain is a 16% hike and this has Family Dollar shares higher by 2.8% at $55.25.  This will take the 1.3% yield indication on the financial screens up to a better yield of about 1.5% for dividend investors.

It may not seem like a high yield, but the company has now claimed to have raised its dividend each year at a compound average rate of approximately 16%.

Dollar stores of today are really stores that sell items under $10.00 in most cases.  Family Dollar pays a dividend, while Dollar Tree and Dollar General Corporation (NYSE: DG) do not.

JON C. OGG