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

By Sean Williams - Dec 12, 2012 at 10:39AM

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In the spirit of giving, we begin counting down the Foolish 12 days of Christmas!

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 (MOS 1.43%)*

$0.05

$0.25

500%

PotashCorp (POT)

$0.07

$0.21

200%

Westlake Chemical (WLK 3.68%)

$0.07375

$0.1875

154%

Gannett (GCI)

$0.08

$0.20

150%

Cisco Systems (CSCO -0.26%)

$0.06

$0.14

133%

Cliffs Natural Resources (CLF -1.52%)

$0.28

$0.625

123%

Agrium (NYSE: AGU)*

$0.225

$0.50

122%

MasterCard (MA -0.79%)

$0.15

$0.30

100%

Cracker Barrel (CBRL 1.21%)

$0.25

$0.50

100%

IAC/Interactive (IAC)

$0.12

$0.24

100%

Ralph Lauren (RL 3.77%)

$0.20

$0.40

100%

Wendy's (WEN 2.65%)

$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 (MSFT -0.74%).

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.

Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

The Motley Fool owns shares of Cisco Systems, MasterCard, McDonald's, Microsoft, and Apple. Motley Fool newsletter services have recommended buying shares of Visa, McDonald's, and Apple, as well as creating a covered call position in Cracker Barrel, creating a synthetic covered call position in Microsoft, and creating a bull call spread position in both McDonald's and Apple. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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.

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Stocks Mentioned

Microsoft Corporation Stock Quote
Microsoft Corporation
MSFT
$287.02 (-0.74%) $-2.14
Nutrien Stock Quote
Nutrien
POT
Mastercard Incorporated Stock Quote
Mastercard Incorporated
MA
$350.58 (-0.79%) $-2.80
Cliffs Natural Resources Inc. Stock Quote
Cliffs Natural Resources Inc.
CLF
$19.45 (-1.52%) $0.30
The Wendy's Company Stock Quote
The Wendy's Company
WEN
$21.29 (2.65%) $0.55
Cisco Systems, Inc. Stock Quote
Cisco Systems, Inc.
CSCO
$45.90 (-0.26%) $0.12
Gannett Co., Inc. Stock Quote
Gannett Co., Inc.
GCI
Ralph Lauren Corporation Stock Quote
Ralph Lauren Corporation
RL
$99.12 (3.77%) $3.60
Westlake Chemical Corporation Stock Quote
Westlake Chemical Corporation
WLK
$103.22 (3.68%) $3.66
Match Group, Inc. Stock Quote
Match Group, Inc.
IAC
The Mosaic Company Stock Quote
The Mosaic Company
MOS
$54.76 (1.43%) $0.77
Cracker Barrel Old Country Store, Inc. Stock Quote
Cracker Barrel Old Country Store, Inc.
CBRL
$105.39 (1.21%) $1.26

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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