3 Hot Dividend Stocks for Your Portfolio

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

This month, the Los Angeles Times wrote that 444 American companies increased their dividends in the second quarter of this year, while only 21 scaled back their payouts. But it's hard to keep track of 444 companies, so I've highlighted three stocks that will help you diversify your portfolio and take advantage of this dividend trend.

Dividend Rx
Coming off a great third quarter when earnings rose an unexpectedly high 30%, Walgreen (NYSE: WAG  ) announced it would increase its quarterly dividend from $0.175 to $0.225 a share, a 29% increase. This marks the 36th consecutive year Walgreen has increased its dividend.

There is some speculation, however, that Walgreen will run into some trouble over a coming contract renewal with pharmacy benefits manager Express Scripts (Nasdaq: ESRX  ) . The current relationship generates about $5 billion in sales annually, and while most analysts expect the situation to resolve itself, there is no guarantee that Walgreen will come out of the negotiation unscathed.

Double up the dividends
Mining company Cliffs Natural Resources (NYSE: CLF  ) is a dividend champ. It announced last week that it was increasing its dividend 100% on the strength of recent price gains and iron-ore demand from China. The quarterly dividend will double to $0.28 a share. The increase will cost the company about $19 million a quarter, but its CFO is confident that its projected growth positions will yield excellent future cash flows.

Dividends for breakfast
When I broke out the dividend leaders in the food industry last month, I mentioned that General Mills (NYSE: GIS  ) had a history of raising its dividend in the fourth quarter (ending in May). Sure enough, the company did not disappoint. As if to say "the next round of Cheerios is on us," General Mills upped its dividend almost 9%. This increase is about in line with the rest of the industry for 2011, lower than J.M. Smucker (NYSE: SJM  ) at 10% and higher than Kellogg (NYSE: K  ) at 6%.

The increase will cost the company an additional $64 million annually, but investors needn't worry. General Mills is old hat at the dividend game, consistently paying out to investors for the last 112 years.

Bottom line
A diverse portfolio is crucial to investing. If investors can incorporate strong dividend stocks into that diversity, especially with companies with excellent dividend pedigrees like Walgreen and General Mills, then they are that much better off.

Interested in dividend stocks? Check out our free report, "13 High-Yielding Stocks to Buy Today."

Fool contributor Aimee Duffy doesn't own shares of the companies mentioned in this article. Motley Fool newsletter services have recommended buying shares of Kellogg. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Read/Post Comments (0) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1521342, ~/Articles/ArticleHandler.aspx, 10/27/2016 1:21:13 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,208.54 9.21 0.05%
S&P 500 2,137.35 -2.08 -0.10%
NASD 5,230.23 -20.04 -0.38%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/27/2016 1:05 PM
CLF $5.13 Down -1.08 -17.34%
Cliffs Natural Res… CAPS Rating: ***
GIS $60.85 Up +0.01 +0.02%
General Mills CAPS Rating: ****
WBA $82.07 Down -0.23 -0.28%
Walgreens Boots Al… CAPS Rating: ****
ESRX $70.31 Down -0.08 -0.11%
Express Scripts CAPS Rating: *****
K $74.31 Up +0.24 +0.32%
Kellogg's CAPS Rating: ****
SJM $129.80 Down -0.69 -0.52%
J.M. Smucker CAPS Rating: *****