4 Companies That Took a Hike

Dividends aren't just about the money. Sure, it's great to have a little more when companies ramp up their payouts, but it's also a fair sign that a company feels confident about increasing its cash flow in the future. Stocks that boost their dividends make an interesting pool of income-producing investing opportunities with the added potential for a capital-appreciation kicker.

Let's take a closer look at four of the companies that inched their payouts higher this past week.

General Mills (NYSE:GIS) has a new Green Giant -- its dividend. The cereal and supermarket staple specialist hiked its quarterly dividend from $0.33 to $0.34 per share. It may not seem like much, but it happens to be the second time the foodstuffs conglomerate has inched its distributions higher in the past six months. This is the classic example of a stock where higher yields indicate higher fundamentals; the company's new dividend announcement came on the same day that the company raised its earnings outlook for the year.

Remember when Microsoft (NASDAQ:MSFT) wasn't even paying a dividend? You don't have to jog your memory too far back. The world's leading software company initiated its payout policy in 2003. Flush in cash and with limited buying opportunities -- given the close vigilance of antitrust watchdogs -- paying a dividend made perfect sense for Mr. Softy. Now the quarterly distribution for this recent Inside Value recommendation will be climbing by a penny to $0.09. The company's new yield of 1.3% may seem like a pittance now that many money market funds are yielding better than 4%, but it's still more jingle in the pockets of the Microsoft faithful.

Pfizer (NYSE:PFE) was another hiker. Oh, right. Please insert your Viagra joke of choice here. The drugmaker's quarterly dividend will now be 26% higher. Shareholders will be receiving $0.24 every three months starting in March, a marked improvement over the company's recent $0.19-per-share allotments.

Financially speaking, Pfizer is in better shape than many of the other fallen big pharma names, such as Merck (NYSE:MRK) and Bristol-Myers Squibb (NYSE:BMY). However, all three companies have managed to find share price support in the $20s thanks to their generous distributions.

Then we have T. Rowe Price (NASDAQ:TROW). The mutual fund giant knows that consistent gains is at the heart of any thriving stock fund, and its own investors have to feel the same way. In growing its quarterly dividend by a nickel to $0.28 a share, it marks the 19th straight year in which T. Rowe Price has hiked its distributions.

Subscribers to our Motley Fool Income Investor newsletter can appreciate companies sending 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? Maybe the next thing that will get hiked will be your interest.

Merck is a Motley Fool Income Investor recommendation.

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. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.