There were some major dividend drops during the last week. Fiat SpA announced that it wouldn't pay a dividend after cutting its earnings forecast and its plans to take a 35% stake in Chrysler. Nokia (NOK) cut its dividend for the first time in seven years. SunTrust Banks (STI) sliced its dividend by 81%.
In spite of all the bad news, there were plenty of companies that raised their dividends, too, including several financial stocks. Stockpickr has plowed through the list of dividend declarations and compiled a list of the top dividend-increasers for the week.
One of the dividend-raisers was Canadian National Railway (CNI), the rail transportation company, which elevated its dividend by 10% to 25.25 cents per share, to be paid on March 31, 2009, to shareholders of record on March 10. This gives the stock a yield of 2.3%, less than that of its major Canadian railroad competitor, Canadian Pacific Railway (CP), at 2.7%. Canadian National Railway was recently downgraded from buy to hold by TheStreet.com Ratings due to decreasing profit margins and below-average net income growth. The stock has a reasonable debt-to-equity ratio of 0.8 and is currently trading at $33.69 vs. its book value of $29.93 per share. The company has a favorable P/E ratio of 10.
Bill Gates, through his investment vehicle Cascade Investments, is an owner of Canadian National. As a matter of fact, it is Gates' largest stockholding. Cascade is a Kirkland, Wash.-based private investment and holding company that handles the investments of this Microsoft (MSFT) billionaire. Bill Gates also has his money invested in Republic Services (RSG), with a yield of 2.9%; Grupo Televisa (TV), with a 2.4% yield; and Warren Buffett's Berkshire Hathaway (BRK.A), which doesn't pay a dividend.
Another company that lifted its dividend is Genuine Parts (GPC), the distributor of automobile replacement parts, which bumped up its dividend by 2.6% to 40 cents per share from 39 cents, to be paid on April 1 to shareholders of record March 6. The stock has a nice yield of 4.6%, but the company just cut its guidance, announcing that its full-year results will be below its previous forecast. The stock has a over $124 million in cash, more than enough to cover is $250 million in long term debt. They have a P/E of 10.
Genuine Parts is held by the Dodge & Cox Stock Fund, a San Francisco-based mutual fund with a Morningstar rating of four stars. The fund has been up in eight out of the last 10 years. It also own Time Warner (TWX), with a yield of 2.7%; Capital One Financial (COF), with a yield of 6.8%; and Wells Fargo (WFC), with a very high yield of 8.6%.
For more ideas, check out the top dividend-increasers for the week portfolio, which includes one stock that raised its dividend by 40%, on Stockpickr.
Posted on Jan. 25, 2009
