By Stockpickr Staff
Posted on June 24, 2009

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It's not just the American public that likes dividends. Even the U.S. government is getting in on the act. JPMorgan (JPM) recently repaid the $25 billion in TARP funds it had received, after it had already dished out $795.1 million in dividends to the government.

A sign of strength in a stock is a dividend increase. David Peltier of the Dividend Stock Advisor has said that after such a rough 2008, which saw companies cutting dividends, he's looking for companies that have proven themselves with regular dividend increases and the cash to cover the payouts.

Stockpickr has reviewed the recent dividend declarations and compiled a portfolio of the top dividend-raisers for the week.

The big news on the dividend front was that Del Monte Foods (DLM), a stock that trades for less than $10 per share, is increasing its quarterly dividend by 25% to 5 cents a share, up from 4 cents per share, payable on Aug. 6 to stockholders of record as of July 23. Although the dollar amount of the increase isn't that much, the percentage is significant. The dividend raise for this branded food and pet food company provides a yield of 2.2%.

Del Monte recently announced a 42% boost in fourth-quarter earnings to $71.5 million, or 36 cents per share, vs. $50.4 million, or 25 cents per share, a year ago. This was primarily due to increases in prices and lower taxes. The dividend payout of $9.89 million is greatly exceeded by Del Monte's operating cash flow of $200 million. The company has $1.56 billion in debt with $142.7 million in cash.

The mutual fund that owns the most number of shares of Del Monte is the Longleaf Partners Small-Cap Fund, which invests at least 80% of net assets in a limited number of companies considered small-cap at the time of purchase and believed to be significantly undervalued. The fund has outperformed the Russell 2000 Index over the last five years and the last 10 years. The fund also owns Fairfax Financial Holdings (FFH), which yields 3.3%; Washington Post (WPO), which yield 2.5%; and Everest Re Group (RE), which pays a yield of 2.7%.

Another company that bumped up its dividend is John Wiley & Sons (JW.A), the publisher of the famous For Dummies series of books, which increased its dividend for the 16th consecutive year. It declared a quarterly cash dividend of 14 cents per share on its Class A and Class B stock, which is payable on July 14 to shareholders of record on July 6, 2009. This gives the stock a yield of 1.7%.

One of the company's directors recently purchased $350,000 worth of company stock. However, John Wiley's fiscal fourth-quarter profit dropped by 16%, on a 7% fall in revenues. Its payout of dividends in the amount of $32.6 million is extremely well-covered by its operating cash flow of $253.7 million. The company has $72.4 million in cash with $888 million in total debt.

Wiley is favored by Bruce S. Sherman, CEO and chief investment officer of Private Capital Management, which was founded in 1986 and utilizes a basic value approach to buying stocks. Sherman also invests in CA (CA), with a 0.9% yield; Hewlett-Packard (HPQ), which yields 0.8%; and Northern Trust (NTRS), which pays a yield of 2.2%.

For more ideas, including a company that pays out monthly dividends, check out the Top Dividend-Increasers portfolio on Stockpickr.

At the time of publication, the author had no positions in stocks mentioned.