I think I missed another dividend increase this week on a position I hold. DEO raised their dividend again. Maybe I saw it, but I don't recall. I saw it in Investors Business Daily this morning.
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'Sin Stocks' Diageo, Altria Hike Dividend
By PATRICK CAIN, INVESTOR'S BUSINESS DAILY
Posted 08/27/2010 06:06 PM ET
Two so-called "sin stocks" recently lifted their dividend payouts. This is an indicator of financial strength that potential income investors should keep an eye on.
Sin stocks are those that cash in on others' addictions, much like the $47 billion tobacco giant Altria (MO) does. The maker of Marlboro cigarettes said it would lift its dividend 8.6% to 38 cents a quarter. The company's dividend now yields 6.8% annually. It is payable on Oct. 12 to shareholders as of Sept. 15. Its ex-dividend date is Sept 13.
This is the second time the company has lifted its dividend in 2010. So far on the year its dividend is up 11.8%. This is in line with the company's dividend payout ratio target of 80% of its adjusted diluted earnings, Altria said in a press release.
Shares are just 2% off their 52-week high, which is the second- best for tobacco companies.
But nicotine isn't the only sinful type of product you can cash in on. Alcohol is another popular area.
U.K.-based Diageo (DEO) is one of four stocks in the rapidly rising alcoholic beverages group that trade above $10 and have an EPS rating of 80 or higher.
The company's stock has been struggling of late, though. Diageo has fallen five weeks straight, and volume kicked in during the most recent week. During that time the maker of brand-name beer, vodkas, whiskeys and rum dropped below its 10-week and 40-week moving averages. That said, it's only 8% off its 52-week high, and the stock is still up 62% from its March 2009 low.
Diageo reported earnings Thursday and said it will raise its quarterly dividend by 6% to roughly 36.5 cents per foreign share. It also said that increasing the yield by 6% is what it sees as the new benchmark for future increases, up from 5% hikes.
It also gave a cautious outlook despite signs that North American consumers are returning to more expensive brands.
investors.com |
