In the second quarter, 444 American companies increased their dividends, while only 21 scaled things back.  It's hard to keep track of 444 companies, so I've highlighted two stocks that will help you diversify your portfolio and take advantage of this dividend trend. I've also singled out one company you should definitely ignore.

Dividend machine
Global engine manufacturer Cummins (NYSE: CMI) raised its quarterly dividend 52% on the strength of a healthy balance sheet. Its payout increased from $0.26 to $0.40 a share, driving its dividend yield up from 1% to about 1.5%. However modest, that's an improvement nevertheless.

Victimized by the recession a few years ago, but adapting to strict environmental standards, the company has really bounced back. Foreign sales in India and Brazil are booming, and demand for natural gas and hybrid engines has been picking up in developed economies. 

If I could turn back time
Whether it's because I'm young and full of vitality, or simply just late to the game, I had never heard of Nu Skin (NYSE: NUS) until it popped up on my dividend radar. The initial news of a 19% increase for its quarterly dividend intrigued me. I immediately grew cynical, realizing the company was a direct seller of anti-aging creams and machines until -- great Scott! -- Nu Skin has increased its quarterly dividend 220% in the last 10 years! 

Obviously, this is no reason to run out and buy the stock straight away, but it certainly prompts a closer examination of the company.  I started out by checking what my fellow Fools were saying at Motley Fool CAPS, our free online investing community. CAPS investor slamdunk10 wrote late last month:

Look at the products, the number of baby boomers, the emphasis on looking young and in great health, the amount of money spent to appear our best. This company has found a successful niche and is coming out with new products each year. This is the "Apple" of the anti-aging companies.

That's a solid point. More importantly, I like the company's three straight years of record-breaking revenue in the anti-aging industry, which Nu Skin believes will hit $1 trillion as a huge percentage of the global population ages. I'm definitely adding Nu Skin to My Watchlist.

Now is not the time
USA TODAY parent company Gannett (NYSE: GCI) reminds investors that just because a dividend rises doesn't mean a company is worth buying into. Gannett doubled its dividend on the strength of increased digital sales in the second quarter, though overall earnings plunged 22%. 

Unlike The Washington Post Co. (NYSE: WPO), a traditional publisher that has grown beyond one-trick pony status, Gannett still derives the vast majority of its income from publishing, an industry whose future makes me nervous to say the least. The second-quarter gains Gannett is celebrating with its dividend increase come mostly from its digital revenue stream; print advertising and subscription revenue both declined, while broadcasting revenue remained flat. This would worry me if digital were Gannett's crown jewel, but it's not; it has the least operating revenue of the four main segments. Until I see a revenue source that makes up for the decline in publishing, I plan to keep my distance.

Bottom line
A diverse portfolio is crucial to investing. Now more than ever, investors are keen on supplementing that diversity with stocks that generate income. But in Gannett's case, we're reminded that just because a stock follows a trend doesn't mean you should follow the stock.

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. 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.