The Weekly Dividend (CLF, CPY, FDS, KEI, MSA, OPNT, POR, TKR, F, BBT, DOW, FUN, BP, GMCR, SPAN, TNK, IIJI, RAIL)

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We are not seeing the floodgate of dividend hikes as we had seen in earlier weeks this year, but hikes, talk of hikes, and other big dividend news changes are out this week.  The true dividend hikes are in Cliffs Natural Resources Inc. (NYSE: CLF), CPI Corp. (NYSE: CPY), FactSet Research Systems Inc. (NYSE: FDS), Keithley Instruments Inc. (NYSE: KEI), Mine Safety Appliances Co. (NYSE: MSA), OPNET Technologies Inc. (NASDAQ: OPNT), Portland General Electric Company (NYSE: POR), and The Timken Company (NYSE: TKR).  The hints of dividends includes Ford Motor Co. (NYSE: F), BB&T Corp. (NYSE: BBT), The Dow Chemical Company (NYSE: DOW), Cedar Fair LP (NYSE: FUN), BP plc (NYSE: BP), and Green Mountain Coffee Roasters, Inc. (NASDAQ: GMCR).  Higher dividends that might not be outright hikes were seen in Span-America Medical Systems Inc. (NASDAQ: SPAN), Teekay Tankers Ltd. (NYSE: TNK), and Internet Initiative Japan Inc. (NASDAQ: IIJI).  There is a downside of dividends, and that included FreightCar America, Inc. (NASDAQ: RAIL).   Details on each are provided below, including the changes, a new implied yield and added color on each where applicable.

Real Hike, Real Payouts….

Cliffs Natural Resources Inc. (NYSE: CLF) voted early this week to increase the quarterly cash dividend by 60% to $0.14 per share.  That is close to a yield of 2% now after the drop in the stock.

CPI Corp. (NYSE: CPY) also voted early this week to increase its quarterly dividend payout by 25% up to $0.25 per quarter.  The yield today would be about 3.3%.

FactSet Research Systems Inc. (NYSE: FDS) approved a 15% hike to $0.23 per quarter in dividends from a prior rate of $0.20 per quarter.  This is about 1.15% today for a dividend yield.

Keithley Instruments Inc. (NYSE: KEI) increased its quarterly dividend early this week to a rate of $0.0375 per share, and this new dividend yield is almost 1.5%.

Mine Safety Appliances Co. (NYSE: MSA) must be expecting new business lines…  today declared a second quarter dividend of $0.25 per quarter, up a penny from the prior $0.24 per quarter dividend that had been in place since early 2008.

OPNET Technologies Inc. (NASDAQ: OPNT) hiked its payout after earnings early this week. It raised its quarterly dividend to $0.10 per quarter for almost a 2.4% yield.  That is $0.40 per year, up from $0.36 per year for 2009.

Portland General Electric Company (NYSE: POR) announced Thursday night that it was boosting its dividend to $0.26 per share per quarter from a rate of $0.255 previously.  The last three hikes have come each year and have been by a full penny rather than by a half-penny per quarter.  This still generates more than a 5% yield.

The Timken Company (NYSE: TKR) announced earlier this week that it declared a quarterly cash dividend of $0.13, up 44% or versus a $0.09 prior dividend.  This is after the company had seen its dividend go down to $0.09 from $0.18 previously in 2009, so this dividend raise is a game of moving back to even.

Dividend Hints……

Ford Motor Co. (NYSE: F) also hinted this week at a dividend return for shareholders, but the news we saw was that it is starting its education pay plan first after it repays more debt.  Don’t hold your breath here for a dividend on the common shares any time in the immediate future.

BB&T Corp. (NYSE: BBT) hinted earlier this week that it would be among the first of the big banks to raise its dividend.  On CNBC it seems that the hint was for a fourth quarter dividend raise, although it is no secret that the new environment is one where regulators have told banks to build capital reserves over paying out higher common dividends.  The current rate is $0.15 per quarter, but that was down from $0.47 previously and the current payout was what it was in the 1990’s.

The Dow Chemical Company (NYSE: DOW) declared a dividend of $0.15… this is one we still expect that will buckle to peer pressure and may consider raising its dividend later this year.  Much depends upon the merger integration from the 2009 Rohm & Haas deal and the notion that its business is just coming back.  The current $0.15 per quarter still generates a yield of close to 2.2%, but this is down from $0.42 before it cut that dividend over a year ago.

Cedar Fair LP (NYSE: FUN) has seen this week with its largest shareholder (Q Funding) demanding that the company reinstate an annual dividend of $0.50 per share after suspending it in 2009.  That does not assure a hike, but that is the largest holder.  A $0.50 dividend would have an indicated yield before any share price changes of approximately 3.7%.

BP plc (NYSE: BP) has been in the soup over the Gulf of Mexico spill, but this week it declared on Tuesday that its board of directors has approved on April 27, 2010 an interim dividend of USD$0.14 per ordinary share or USD$0.84 per ADS for the first quarter 2010.  This is technically a U.K.-based company, so it is doubtful that the administration can nix the dividend.  Still, you have to wonder with cost estimates all over the board into the billions of dollars for the cleanup and remediation.

And speaking of very dividends, the stock split for Green Mountain Coffee Roasters, Inc. (NASDAQ: GMCR) of 3 for 1 will be reflected next week on the May 17 ex-date.  Not a true dividend because these are generally tax-free events.

Higher Dividends, Maybe Not Hikes….

Span-America Medical Systems Inc. (NASDAQ: SPAN) usually has a $0.10 per quarter dividend, but this week it announced a Special Cash Dividend of $1.00 per share.  That makes the third special dividend, and the regular $0.10 dividend is in effect as well.

Teekay Tankers Ltd. (NYSE: TNK) pays out its income as it comes and is able, so this “higher dividend” should not be considered a true hike.  It announced a cash dividend of $0.37 per share, and here are the prior dividend rates to show the inconsistent rates:

  • Mar 4, 2010 $0.26 Dividend
  • Nov 18, 2009 $0.15 Dividend
  • Aug 20, 2009 $0.40 Dividend
  • May 20, 2009 $0.59 Dividend
  • Mar 4, 2009 $0.72 Dividend
  • Dec 1, 2008 $1.07 Dividend
  • Aug 13, 2008 $0.90 Dividend
  • May 21, 2008 $0.70 Dividend
  • Feb 13, 2008 $0.115 Dividend

Internet Initiative Japan Inc. (NASDAQ: IIJI) is one we have not seen the ADR list a dividend, so this may just be in local currency.  The company said on Thursday’s earnings that its FY2009 year-end cash dividend forecast was revised from JPY1,000 to JPY1,250 per share of common stock (FY2009 total dividend of JPY2,250, up from JPY2,000 as previously planned).

The Downside of Dividends….

FreightCar America, Inc. (NASDAQ: RAIL) this week that its Board of Directors decided not to authorize the payment of a cash dividend on its common shares in the second quarter of 2010 to preserve cash to help maintain its balance sheet strength.

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JON C. OGG

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