The Big Week of Dividends (ACE, BG, CLX, DPS, FRO, KNX, NOC, SWY, TRH, TIF, XEL, GE)
This week felt like the sudden snap-back for dividend hikes after a week or two of fewer news announcements from major companies. It was in big companies too, rather than just the tiny ones. Some of the big dividend hikes came from ACE Limited (NYSE: ACE), Bunge Limited (NYSE: BG), Clorox Company (NYSE: CLX), Dr. Pepper Snapple Group, Inc. (NYSE: DPS), Frontline Ltd. (NYSE: FRO), Knight Transportation, Inc. (NYSE: KNX), Northrop Grumman Corporation (NYSE: NOC), Safeway Inc. (NYSE: SWY), Transatlantic Holdings, Inc. (NYSE: TRH), Tiffany & Co. (NYSE: TIF), and Xcel Energy Inc. (NYSE: XEL). And there is some runner-up news from General Electric Co. (NYSE: GE) on its planned dividend hike.
ACE Limited (NYSE: ACE) saits its approved shareholder matters included a 6.5% increase to its quarterly dividend to $1.32 annually ($0.33 per quarter) from $1.24. This gave the insurer and reinsurer a yield of 2.5% at the time.
Bunge Limited (NYSE: BG) approved a 9.5% increase in the company’s regular quarterly cash dividend, from $0.21 to $0.23 per common share. The current yield is 1.89% on the dividend.
The Clorox Company (NYSE: CLX) declared a quarterly dividend of $0.55 cents per share, which is up a nickel or by 10%. The household and consumer products company now has an implied dividend yield of 3.4%.
Dr Pepper Snapple Group, Inc. (NYSE: DPS) is one we already predicted this year that would hike the payout. It did, and handsomely. The quarterly dividend of $0.25 per share is up 67% and “follows the company’s attainment of its target capital structure.” The new implied dividend yield will be 2.6%.
Frontline Ltd. (NYSE: FRO) looks like a 200% boost to the payout as the new dividend is $0.75 versus $0.25 a quarter ago. The problem is that the payouts here from the company are never set at a consistent rate and they have even been much higher in the past. That being said, we are not using a dividend yield calculation here. Still, this is the highest payout announced for at least six quarters.
General Electric Co. (NYSE: GE) did not yet hike its dividend, although Immelt laid out an even more detailed time line and we gave our prediction for what that payout would be.
Knight Transportation, Inc. (NYSE: KNX) declared a 20% increase of the company’s quarterly cash dividend to $0.06 per share of common stock from $0.05 per share. The new dividend yield is close to 1.2%.
Northrop Grumman Corporation (NYSE: NOC) declared a quarterly dividend of $0.47 per common share, a 9.3% from the previous $0.43 per share payout and is the seventh consecutive annual increase. The implied dividend yield is now over 3.0%.
Safeway Inc. (NYSE: SWY) announced that its board declared a regular quarterly cash dividend and approved a 20% increase from $0.10 per share to $0.12 each quarter per share. The grocery chain now yields 2.0%.
Tiffany & Co. (NYSE: TIF) lifted it dividend after already having raised it before. The high-end jewelry retailer boosted its quarterly dividend by 25% to $0.25 from $0.20 per quarter. The $1.00 dividend comes to almost 2.4% for a yield, still far south of what Buffett gets on his preferred shares.
Transatlantic Holdings, Inc. (NYSE: TRH) raised its quarterly dividend by 5% to $0.21 per share, and that marks yet another consecutive year of dividend payout hikes by the reinsurer. That left an implied dividend of 1.8%.
Unum Group (NYSE: UNM) announced this week an increase of 12.1% in dividend payouts to $0.0925 per common share, giving an implied dividend yield of 1.7%. The company also announced a $500 million buyback plan.
Xcel Energy Inc. (NYSE: XEL) raised its quarterly dividend from $0.245 per share per quarter to a rate of $0.2525 per share per quarter. The electric utility’s old annual payout of $0.98 will now be $1.01, and that in turn generates a dividend yield of about 4.75%.
The hikes keep coming, but this was a bad week for companies announcing good news. Stay tuned for more dividend hike predictions… followed by more dividend hikes.
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JON C. OGG