Gregg S. Fisher noted in a 2009 Forbes article that the assumption that investors are rational agents is bunk. He went on to say "We are not rational. We're human. Even the most brilliant investor can be swayed by emotions into making irrational decisions that result in financial loss."
Logic has very little to do with short-term movements in stock prices. Knowing this, there are some things that long-term buy-and-hold investors can do to profit from from these irrational moves in the market, such as following a disciplined approach of acquiring stocks that routinely increase their dividends.
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Below are several companies that have recently increased their cash dividends to shareholders:
Developers Diversified (DDR) is a self-administered and self-managed real estate investment trust that acquires, develops, leases and manages shopping centers across the U.S. January 10th the company increased its quarterly 100% dividend to $0.04/share. The common dividend is payable April 5, 2011 to shareholders of record at the close of business on March 22, 2011. The ex-dividend date is March 18, 2011. The yield based on the new payout is 1.2%.
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Epoch Holding (EPHC) provides investment advisory and investment management services for retirement plans, mutual funds, endowments, foundations and high net worth individuals. January 10th the company raised its quarterly dividend 20% to $0.06/share. The dividend is payable on February 11, 2011 to shareholders of record as of January 28, 2011. The ex-dividend date is January 26, 2011. The yield based on the new payout is 1.6%.
CVS Caremark (CVS) is a leading operator of retail drug stores and pharmacy benefit management services in the U.S. January 11th the company increased its quarterly dividend 43% to $0.125/share. The dividend payable on Feb. 2 to shareholders of record on Jan. 21. The ex-dividend date is Jan. 19. The yield based on the new payout is 1.42%.
International Paper (IP) is a leading worldwide producer and distributor of printing papers and packaging products. January 11th the company raised its quarterly dividend 50% to $0.1875/share. The dividend is payable March 15, 2011 to shareholders of record on February 15, 2011. The ex-dividend date is February 11, 2011. The yield based on the new payout is 2.7%.
Alexander's (ALX) leases, manages, develops, and redevelops properties in the United States. Its properties include office and retail properties, and shopping centers. January 12th the company increased quarterly dividend 20% to $3.00/share. The dividend is a 20% increase from the current rate of $2.50. The increased dividend will be payable on February 22, 2011 to stockholders of record on January 28, 2011. The ex-dividend date is January 26, 2011. The yield based on the new payout is 3%.
Vornado (VNO) owns a diverse group of properties, including Northeast retail properties, New York City office buildings, and other interests. January 12th the REIT raised its quarterly dividend to $0.69/share. The dividend is payable on Feb. 22 to shareholders of record on Jan. 28. The ex-dividend date is Jan. 26. The yield based on the new payout is 3.28%.
Selecting stocks with increasing dividends is critical for an income growth strategy. The above list contains stocks that recently raised their dividends; it is not a list of recommend buys. As always, due diligence should be performed before buying or selling any stock. For a list of stocks with a long string of consecutive cash dividend increases, see this list.
Full Disclosure: No position in the aforementioned securities. See a list of all my income holdings here.