12 Companies Doubling Their Dividends in 2012 and 1 to Watch in 2013

In the theme of Christmas and the spirit of giving, I plan to use the next two weeks leading up to Christmas to count down the 12 Days of Christmas in all its Foolish glory. In my rendition of this Christmas tale, you won't be hearing about turtledoves or French hens, but you'll probably hear about great ways to save money in 2013 or about CEOs who laid rotten eggs in 2012.

So, without further ado, let's get started! I should also make you aware that my expectation is that you'll be singing this portion in front of your computer...

"On the 12th day of Christmas my true love gave to me..."

Twelve companies that doubled their dividends in 2012 and one to watch in 2013!

Company

Last Quarterly Payout (2011)

Most Recent Quarterly Dividend

Increase

Mosaic (NYSE: MOS  ) *

$0.05

$0.25

500%

PotashCorp (NYSE: POT  )

$0.07

$0.21

200%

Westlake Chemical (NYSE: WLK  )

$0.07375

$0.1875

154%

Gannett (NYSE: GCI  )

$0.08

$0.20

150%

Cisco Systems (NASDAQ: CSCO  )

$0.06

$0.14

133%

Cliffs Natural Resources (NYSE: CLF  )

$0.28

$0.625

123%

Agrium (NYSE: AGU  ) *

$0.225

$0.50

122%

MasterCard (NYSE: MA  )

$0.15

$0.30

100%

Cracker Barrel (NASDAQ: CBRL  )

$0.25

$0.50

100%

IAC/Interactive (NASDAQ: IACI  )

$0.12

$0.24

100%

Ralph Lauren (NYSE: RL  )

$0.20

$0.40

100%

Wendy's (NASDAQ: WEN  )

$0.02

$0.04

100%

Source: Individual press releases. *Mosaic and Agrium pay out semiannual dividends.

The standouts
As you can see from the above, phosphate and fertilizer producers were big boosters to income-seekers' bottom lines in 2012. Mosaic raised its semiannual dividend by 500%, PotashCorp bumped its quarterly dividend 200%, and Agrium lifted its semiannual payout by 122%. Granted, none of these yields are particularly high, with PotashCorp's 2.1% yield being the highest, but the simple fact that fertilizer producers chose to boost yields now signifies what could be the beginning of a long-term bullish trend in the industry. A record drought in the U.S. also aided fertilizer companies, which saw their products needed in even higher demand than normal.

Big dividend boosts from Cisco Systems, Cliffs Natural Resources, and MasterCard also helped to put their respective sectors, not previously known for big dividends, on the map.

Cisco is overflowing with cash as it reduces expenses and focuses on its next generation of cloud-computing products. Boosting its dividend by 133% and pushing its yield to just shy of 3% should go a long way to buoying its share price.

Cliffs Natural, the nation's largest iron ore producer, has struggled in recent quarters from a drop-off in iron ore pricing and a dip in worldwide steel demand. You wouldn't know that by its dividend, however, as it's currently yielding north of 8%! With management hell-bent on keeping that robust dividend in place and its cash flow still strong, Cliffs has put miners on the map for dividend income.

Even MasterCard, which admittedly has a minute yield of just 0.3%, is getting in on the giving spirit. Given that MasterCard and its peer Visa are transaction processors with no lending exposure, and that emerging-market growth opportunities appear robust, I feel you're looking at the start of the dividend boom in the credit services sector.

The wannabe
If there is one company on this list that still doesn't entice me, even after a 100% boost in payments to shareholders, it's Wendy's.

Wendy's has struggled to remain profitable for the better part of a decade now as it's spent increasingly more on expanding its chain of fast-food restaurants to compete against the likes of McDonald's, Jack in the Box, and the ailing Burger King Worldwide. Unlike McDonald's and Jack in the Box, which have had resounding success in remodeling their restaurants and introducing healthier food options, Wendy's has lagged the pack and has needed to turn to aggressive advertising campaigns to drive customer traffic. Given the added competition, food inflation, and Wendy's lack of consistency, the sustainability of this dividend hike concerns me.

A dividend boost for 2013
Call me old-fashioned, but if there's a dividend that's primed to get a big boost in 2013, it's Microsoft (NASDAQ: MSFT  ) .

Yes, I'm aware that Microsoft already declared a 15% improvement in its quarterly payment to $0.23 from $0.20 in the past few months, but there are plenty of reasons that it could easily move higher.

First, we have the release of Windows 8, which should help boost cash flow over the short term.

Second, in terms of net cash to market value, both Microsoft and tech giant Apple derive 24% of their current market value from their cash balances. Apple is still growing by double digits and capable of delivering in the neighborhood of $40 billion to $45 billion in cash each year (or about 8% to 9% of its current market value). Microsoft's rapid growth days are behind it now, but it'll still generate about $30 billion in cash each year (or about 13% of its market value). Simply put, Microsoft can generate more cash relative to market value than Apple and should therefore be returning more of that cash to shareholders.

Finally, holding more than 330 million shares of Microsoft stock and being the target of a slew of irritated shareholders who've seen their stock go practically nowhere in a decade, CEO Steve Ballmer and the board of directors may dramatically hike the dividend in order to save their behinds (as well as collect a nice payday). All told, I'm predicting Microsoft's dividend will rise to $0.28-$0.30 per quarter in 2013.

All in all, it's been a frustrating path for Microsoft investors, who've watched the company fail to capitalize on the incredible growth in mobile over the past decade. However, with the release of its own tablet, along with the widely anticipated Windows 8 operating system, the company is looking to make a splash in this booming market in 2013. In this brand-new premium report on Microsoft, our analyst explains that while the opportunity is huge, the challenges are many. He's also providing regular updates as key events occur, so make sure to claim a copy of this report now by clicking here.


Read/Post Comments (7) | Recommend This Article (30)

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.

  • Report this Comment On December 12, 2012, at 11:25 AM, pondee619 wrote:

    You do know that the twelve days of Christmas follow Christmas and end with the of Epiphany?

  • Report this Comment On December 12, 2012, at 6:30 PM, hank321 wrote:

    Both APPL and MSFT have large cash holdings, but mostly OUTSIDE the US. If they repatriate it to pay dividends, it gets taxed at very high rates. Not worth it.

  • Report this Comment On December 14, 2012, at 9:18 PM, WineHouse wrote:

    There are two "camps" out there with regard to Windows 8 -- those who love it and thoe who hate it. Fact is, to my mind at any rate, it's a sort of Apple rip-off, in that it 1, integrates the PC software with the tablet / smartphone software and 2, brings in "the cloud" as an integral part of that integration (did I just write "integral part of that integration"? good grief -- but you know what I mean). Even the finger-swiping stuff for PC is conceptually"copied" from the tablet / smartphone world and its progenitor, Apple (Mountain Lion). So my concern (as a MS shareholder) is this -- will the Windows-based PC community cotton to the new MS system in time? More importantly, will the corporate world cotton to it and force its employees to make the switch in time? Because if Windows 8 and the touchy-feely PC hardware languish without enough buyers for more than a few months, this dramatic and necessary (but risky) move by MS will fail, and MS will suffer financially for that. Everything I've read suggests that Winows 8 is an enormous improvement over the previous Windows incarnations, in every possible way -- in fact, it's now equivalent to the MacOS X Mountain Lion. Duh.

    BTW -- I also have Apple shares. No dummy, I spread my risk. AND I recently switched from my indreasingly-detestable Windows XP laptop to a MacBookPro with Mountain Lion, just a few months before Windows 8 appeared on the scene. I watch with baited breath as the battle ensues. May the better system win -- and win by a bigger margin than the loser loses (I would like to profit on balance).

  • Report this Comment On December 18, 2012, at 1:36 PM, ghstflame wrote:

    I'll go out on a limb and post some disagreement with regards to wendy's. I really like the new management team at WEN and they have been laying the groundwork in the past 2 years for some explosive growth. Refinancing all long term debt, changing the menus (comparable to 5 guys and in-n-out ((heresy i know)) there food quality is suburb!

    The new ad campaign seems to have been successful, catchy and continually rolling out new commercials. It won't be long for some big analysts to start watching wendy's closer, expect to see wendy's stock in the high teens in the coming year or 3.

    The management believes too as they did expand their dividend (relatively small) and started a large share buy back plan which in my opinion appears to be ahead of the curve.

  • Report this Comment On December 18, 2012, at 7:55 PM, boisebob wrote:

    What a screwed up article and a waste of my time! What is the percentage dividend now and how much will it be when it doubles??? So if .05 is .001 and I don't care if it doubles!

  • Report this Comment On December 24, 2012, at 8:24 PM, seq101 wrote:

    I have to dissagree with the first poster in regards to Windows 8, being a knockoff of tech belonging to Apple.

    I feel that Apple has stolen alot of technologies from lesser known sources that were developed decades before Apple started using them.

    One of the current debates is in regards to touch screens, first off touch screen media was first made available to the public by a video gamming company that started making a game called "Pot O Gold" in early 1995.

    These gambling machines not only had multiple games, but were touch screen, in which menues were lined up much like Apple, and Microsoft, softwares.

    So to be honest at some point the real owners will probably stake a valid claim against both companies.

    However there are also other so called technologies that are claimed by Apple as being their own, but is far from the truth, for example browsers, for the most part they all function in the same way, and addre4ssing of webpages, converting numbers into readable text was developed by the University of Oregon I beleive it were, in addition it was also a U.S university that also developed LCD screens, (Organic), and touch screen technologies.

    These private corporations pretty much stole these technologies from public funded colleges, and have capitalised off of them, while trying to sue other companies for using it.

    There is a major flaw in the current U.S patent office, this is well known by the Federal government, as they disclose clearly even though you obtain a patent, it does not guarantee that the patent is original and actually belongs to the party claiming ownership.

    yea I know it's kind of like the government creation of the UCC, in which they have developed all sorts of "Financial Instruments", and even instruments that govern those instrumentsd lol.

  • Report this Comment On February 04, 2013, at 11:31 AM, csfarm wrote:

    I'll buy into Microsoft again when they dump Ballmer. It's a long overdue move. MS has some terrific engineers but they are hamstrung by ridiculous policies pitting them against each other. The company reeks of bad juju.

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