8.8 Billion Reasons Why Dividend Increases Are Dynamite

Earlier this week, S&P Dow Jones Indices announced today that dividend net increases (increases less decreases) were $8.8 billion in the third quarter of 2012. This is believed to be a new record for quarterly dividend payouts in aggregate dollars. It was also reported that 439 stocks increased dividends during the third quarter of 2012, a 25.4% gain over 2011. Only 53 companies out of approximately 10,000 decreased their dividend in the third quarter of 2012. Howard Silverblatt, Senior Index Analyst at S&P Dow Jones Indices said:

Dividends continue to have a great year, with actual cash payments increasing over 19% and the forward indicated dividend rate reaching a new all-time high.Payout rates, which historically average 52%, remain near their lows at 34%. At this point, we expect to see double-digit growth in actual dividend payments for the fourth quarter of 2012 and a potential double-double gain in 2013 – depending on Washington.

Below are several other companies that have recently increased their cash dividends to shareholders:

RPM International Inc. (RPM) manufactures and sells specialty chemical products to industrial and consumer markets in the United States and internationally. October 4th the company increased its quarterly dividend 4.7% to $0.225 per share. The dividend is payable on October 31, 2012, to stockholders of record as of October 15, 2012. This is RPM's 39th consecutive year of increased cash dividends. The yield based on the new payout is 3.3%.

Phillips 66 (PSX), an independent downstream energy company, engages in the refining and marketing, midstream, and chemicals businesses. October 3rd the company increased its quarterly dividend 25% to $0.25 per share. The dividend is payable on Dec. 3, 2012 to shareholders of record at the close of business on Oct. 15, 2012. The yield based on the new payout is 2.2%.

Corning Incorporated (GLW) produces specialty glasses, ceramics, and related materials worldwide. October 3rd the company increased its quarterly dividend 20% to $0.09 per share. The dividend is payable on Dec. 14, 2012 to holders of record Nov. 16, 2012. The yield based on the new payout is 2.9%.

Calavo Growers, Inc. (CVGW) markets and distributes avocados, prepared avocados, and other perishable commodities, as well as manufactures and distributes processed avocado products in the United States and internationally. October 2nd the company increased its annual dividend 18% to $0.65 per share. The dividend is payable Dec. 12, 2012 to all stockholders of record as of Nov. 28, 2012. The yield based on the new payout is 2.6%.

American Financial Group, Inc. (AFG) provides property and casualty insurance, and annuity and supplemental insurance products in the United States. October 1st the company increased its quarterly dividend 11% to $0.19 per share. the dividend is payable October 25, 2012 to holders of record on October 15, 2012. The yield based on the new payout is 2.1%.

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 dividend growth holdings here.

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