Dividends may not seem like much. Over the course of the year, they may add up to no more than 1% to 5% of a company's
market capitalization. That's not the point, though. When a company increases its
dividend, it's confident about growing its earnings power in the future. That means more than just the quarterly checks. Let's take a closer look at four of the companies that inched their payouts higher this past week.
Let's start with CSX (NYSE: CSX ) and Burlington Northern (NYSE: BNI ) . Maybe it shouldn't be a coincidence that two of the major railroad operators decided to hike their dividends during the same week. It's all too easy to dismiss the sector as archaic. Wasn't this Dagny Taggart's dying turf in Ayn Rand's Atlas Shrugged way back when?
The rail operators have been chugging along nicely these days. Union Pacific (NYSE: UNP ) and CSX both posted healthygrowth this past week. The top lines grew nicely at both companies, and operating efficiencies widened margins to create even spunkier bottom-line gains. Higher prices at the pump aren't the only factor making railroads seem more attractive for industrial and institutional shipping . There appears to be a legitimate turnaround in this once-rusty sector, and now some of the companies are rewarding their patient investors.
Burlington Northern's dividend will climb from $0.20 to $0.25 a share every quarter. CSX was even more aggressive, announcing a share buyback, a stock split, and a 54% payout spike.
ONEOK (NYSE: OKE ) was another hiker. The Tulsa-based energy distributor with 2 million customers is spiking an already-beefy $0.30-per-share quarterly dividend to $0.32 a share. Readers of the Income Investor newsletter are familiar with ONEOK. The shares have provided a total return of 36% since being recommended to subscribers eight months ago.
Lastly, we can bet the over for the Harrah's Entertainment (NYSE: HET ) dividend. The casino operator may not be increasing the payouts on its slot machines, but it will be lining up the bars just right for its investors. The company's quarterly dividend is rising by 10% to reach $0.40 a share.
Subscribers to our Income Investor newsletter can appreciate companies that send more and more money to their investors. Analyst Mathew Emmert has often singled out companies that are committed to growing their distributions, with market-thumping results.
Want to see what Mathew's liking these days? Go ahead and give his newsletter service a shot with a 30-day trial subscription. Who knows? The next thing that will get hiked might be your interest.
Longtime Fool contributor Rick Munarriz pays attention to yield signs. He does not own shares in any of the companies mentioned in this story.The Fool has a disclosure policy. Rick is also part of theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early.
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