What investor doesn't appreciate a company with healthy cash flows and a steady history of increasing cash dividends? Solid businesses know how to successfully grow dividends and boost shareholder returns. The following companies are creating value by doubling their quarterly dividends, but how sustainable are these returns? Let's take a look.
If you use a credit card, then there's a good chance you have this first company in your wallet. MasterCard
The news comes about a week after MasterCard announced its fourth-quarter earnings that disappointed on profit because of merchant lawsuits. The credit card issuer did beat core earnings estimates, though, thanks to increased card spending. MasterCard is the second-largest payments processor after rival Visa
Fertilize with dividend stocks
The world's largest integrated fertilizer company, PotashCorp
The shares now carry a dividend yield of 1.2%, which isn't very high if you're investing for the income. However, the doubling of its dividend is a good indicator that Potash is taking steps to put its shareholders first. And with a payout ratio of just 16% even after the increase, the company should have no problem boosting dividends in the future.
A bonus pick for higher-yield seekers
My last stock didn't double its dividend, but it's still doing right by shareholders. Men's Wearhouse
The spike in its dividend will cost the company an additional $12.3 million each year. Still, Men's Wearhouse is confident in its ability to generate sustainable free cash flow and continue raising dividend alongside profits.
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Fool contributor Tamara Rutter does not own shares of any companies mentioned in this article. For more Foolish insights, follow her on Twitter, where she uses the handle @TamaraRutter. The Motley Fool owns shares of MasterCard. Motley Fool newsletter services have recommended buying shares of Visa. 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.