Jim Cramer puts it very succinctly: "I like dividends."



Recently, he's favored such dividend stocks as IBM (IBM), which yields 2.2%; Conoco (COP), which yields 4.4%; and Terra Nitrogen (TNH), which yields 9.8%.



A high-yielding stock is certainly desirable, and if a stock's dividend increases, that shows further confidence in the company's future. Stockpickr has reviewed the dividend declarations for the last couple of weeks and compiled a portfolio of the top dividend-increasers.



One of the dividend-raisers is FPL Group (FPL), the Florida-based electric utility, which generates its electricity from natural gas, wind, nuclear, oil and hydro. It bumped up its quarterly dividend to 47.25 cents per share, a 6% increase from the 44.5 cents per share for the previous quarter, giving the stock a healthy yield of 3.9%. The dividend is payable March 16 to shareholders of record on Feb. 27.


On Feb. 17, FPL made the of TheStreet.com Ratings' Top5 All-Around-Value Stocks list due to the increase in its net income and revenue and strong operating cash flow of $3.4 billion. The stock has a P/E ratio of 14, which is a bit high compared to the average P/E of 13 for other utilities. It carries a debt load of $17 billion but is currently maintaining $535 million in cash.

FPL is the largest holding of the Tocqueville Fund, which has a Morningstar rating of five stars and is managed by Robert Kleinschmidt. The fund looks for stocks that are out of favor or undervalued. The fund's return for the last five years ranks in the top 6% of all funds in its large blend category. It also owns Newmont Mining (NEM), which yields 0.9%; Microsoft (MSFT), which yields 2.9%; and Kraft Foods (KFT), with a nice high yield of 4.8%.

Another dividend booster is 3M (MMM), the diversified manufacturing and technology conglomerate. It lifted its quarterly dividend by 2% to 51 cents per share, up from 50 cents, giving it a great 4.3% yield. The company also extended its share-buyback authorization. Last week, its earnings estimates were reduced by Merrill Lynch Bank of America, which gave it a price target of $48.50 and an underperform rating.

The stock has a P/E of 10, slightly above the average PE of 9 for conglomerates. 3M has an incredible $2.22 billion in cash but also has $6.72 billion in debt. Operating cash flow is $4.5 billion per year, more than three times the amount paid out in dividends.

3M is favored by noted trader and investor Leon Cooperman, founder of New York-based hedge fund Omega Advisors. Cooperman is keen on Atlas America (ATLS), with a yield of 1.7%; Williams Companies (WMB), with a yield of 3.1%; and Corning (GLW), with a 1.9% yield.

For more ideas, check out the portfolio of top dividend-increasers on Stockpickr.


Posted on Feb. 23, 2009