I am not a stock trader; I am a dividend and value based long-term buy-and-hold investor. When I add a stock to my dividend portfolio, it is my intention to hold the stock forever. I am not smart enough to time the daily gyrations of the stock market.
When stock prices start dropping, our primal instinct of flight kicks in and we want to sell. In many cases that is the time to be buying. However, sometimes selling a stock is the right thing to do. In determining when to sell a dividend stock, I have one hard and fast rule: When an individual stock held as a dividend investment lowers its dividend, immediately sell it.
Below are several companies making the case not to be sold by raising their cash dividends:
CVS Caremark Corporation (CVS) operates as a pharmacy services company in the United States. December 20 the company increased its quarterly dividend 30% to $0.1625 per share. The dividend is payable on February 2, 2012, to stockholders of record on January 23, 2012. The yield based on the new payout is 1.6%.
Washington Federal, Inc. (WSFL) operates as the holding company for Washington Federal, which provides various financial services in the United States. December 19th the company increased its quarterly dividend 33% to $0.08 per share. The dividend is payable on January 13, 2012 to common stockholders of record on December 30, 2011. The yield based on the new payout is 2.4%.
Crexus Investment Corp. (CXS) operates as a specialty finance company in the United States. December 19th the company increased its quarterly dividend 16.7% to $0.35 per share. This dividend is payable January 26, 2012 to common shareholders of record on December 29, 2011. The ex-dividend date is December 27, 2011. The yield based on the new payout is 13.3%.
AT&T Inc. (T) provides telecommunication services to consumers, businesses, and other service providers worldwide. December 16th the company increased its quarterly dividend 2.3% to $0.44 per share. The dividend is payable on Feb. 1, 2012 to common stockholders of record on Jan. 10, 2012. The yield based on the new payout is 6.1%.
The Andersons, Inc. (ANDE) engages in the grain, ethanol, plant nutrient, railcar leasing and repair, turf products production, and general merchandise retailing businesses. December 16th the company increased its quarterly dividend 36% to $0.15 per share. The dividend is payable January 24, 2012, to shareholders of record on January 3, 2012. The yield based on the new payout is 1.4%.
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: Long T (Dividend Growth Portfolio). See a list of all my dividend growth holdings here.