As promised, this will be the year that I finally pay myself. As such, I'm always on the lookout for companies that are putting shareholders first. In 2011 we witnessed 1,953 dividend increases. Yet, as Fool contributor Morgan Housel has pointed out, the overall payout ratio of the S&P 500 remains at a record-low 29%. This means it isn't enough just to find a dividend -- it's about finding a growing and sustainable dividend.

After perusing some of February's finest, I've settled on five companies that I feel went above and beyond the call of duty to provide for their shareholders last month by increasing their dividend payout.


New Quarterly Dividend

Previous Quarterly Dividend

Increase %

CME Group (NYSE: CME) $3.00 $1.40 114%
Lorillard (NYSE: LO) $1.55 $1.30 19%
Analog Devices (NYSE: ADI) $0.30 $0.25 20%
Gannett (NYSE: GCI) $0.20 $0.08 150%
MasterCard (NYSE: MA) $0.30 $0.15 100%

Source: Bloomberg

CME Group
CME Group keeps finding its name in all the wrong places when it comes to the continuing investigation into MF Global's collapse and the amount of leverage any institution should be allowed. In an attempt to buoy its sagging stock price and bolster investor confidence and traders, CME Group decided it needed to do something drastic.


Source: Dividata

The company made the decision in the fourth quarter to add a variable dividend on top of its fixed annual dividend. In 2011, CME had targeted a payout ratio of 35% of its earnings. In 2012, CME is raising that variable payout ratio as a percentage of earnings to a whopping 50%. This is on top of the $3 per share it plans to pay out annually. While CME's business could be stronger (trading volume fell 2%), a new Illinois tax law with regard to how it recognizes earnings will allow it to earn more and, therefore, pay even more to its shareholders in the future. If CME simply meets current EPS estimates for 2012, its dividend yield could pass 4%.

I can't say I'm a fan of U.S.-based cigarette producers from a legal or social standpoint. I firmly believe that trying to invest in tobacco stocks based solely in the U.S. is like playing with fire, because U.S. laws are stricter than in almost every other country. Still, Lorillard continues to put up monster numbers for shareholders, and it's definitely rewarding them where it counts.

Lorillard's Newport and Maverick brands helped boost the company's quarterly profits by 20%, increased wholesale shipments by 5.6%, boosted gross margin by 320 basis points, and allowed the company to successfully pass along price hikes to consumers. Its domestic market share also rose to 11.7% from 11.1%.


Source: Dividata

With things going well, Lorillard once again made sure to put its shareholders first. Since being spun off from Loews in 2008, the company has raised its dividend four times, with each successive raise higher in percentage terms than the last. Shareholders will most definitely enjoy a newly improved 4.7% yield.

Analog Devices
At first I was shocked to see Analog Devices raising its dividend by 20%, given that revenue and earnings were contracting. But once management opened their mouths, everything put my mind at ease.


Source: Dividata

Although Analog Devices isn't growing like wildfire, management forecast that its business had hit a cyclical bottom sometime during its recently reported quarter and anticipated continued strength from its industrial segment. For the upcoming second quarter, Analog forecast gross margin of 64% to 64.5%, which is up from the 63.2% it reported in the first quarter. As the company becomes more efficient, it's going to be able to return more of its earnings to shareholders. Investors are now going to enjoy a yield north of 3% and a payout ratio of 55%, based on Wall Street's fiscal 2012 estimates.

So much for the demise of the printed newspaper! Gannett, famous for USA TODAY, announced last week that it would begin charging non-subscribing customers for access to its online digital content over the coming year. In similar fashion to The New York Times, Gannett plans to allow users a certain number of free online reads without a subscription before cutting them off. It plans on charging a flat fee for all of its digital content and will institute this policy for 80 of its newspapers.


Source: Dividata

While this might be terrible news if you're an online news junkie, it's great news for Gannett shareholders. The extra $100 million in pre-tax earnings these subscriptions are expected to generate by 2013 allowed Gannett to boost its dividend by a clean 150%! The best part is the stock is now yielding better than 5%, and its payout ratio is still under 40%, based on Wall Street's fiscal 2012 guidance.

Finally: the dividend increase shareholders have been anxiously waiting for! MasterCard, often known for being stingy on the dividend front, followed its peers Visa and Discover Financial Services by doubling its quarterly payout to $0.30 from $0.15 this past quarter.


Source: Dividata.

An increase in the number of transactions and strong gross dollar value growth allowed the credit card behemoth to once again fly past Wall Street's estimates. MasterCard ended the year with $3.7 billion in cash, $2.7 billion operating cash flow in 2011, and no long-term debt, and it's projected to earn $21.82 in EPS in 2012. If anything, shareholders should continue to pound down MasterCard's front door until it doubles the dividend a few more times. At a forward payout ratio of just 5.5%, MasterCard has a long way to go before it really gets in shareholders' good graces on the dividend front, but this was nonetheless a good start. Then again, if the stock continues its march higher, I don't think you'll find too many unhappy shareholders.

Foolish roundup
Finding great dividends is all about value, growth, and sustainability, and these five companies definitely exhibited that in February. Consider adding these names to your free and personalized watchlist so you can keep track of the latest news with each company.

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