It's a good time to hold positions in dividend stocks. Not only do many of them boast yields well above other financial instruments like bonds, but quite a few have been raising their distributions lately.
These hikes not only make investors that much richer, they also often improve the share price of the affected stock. The market, after all, is usually willing to pay that much more for the extra payout.
Among the many raisers of late are these three notable firms.
Las Vegas Sands (LVS +1.65%)
Who's afraid of a downturn? Clearly not this veteran casino resort operator, which despite headwinds in its major market is confident enough to increase its payout. Las Vegas Sands has declared a hefty 30% raise in its quarterly distribution, to $0.65 per share from $0.50.
What helped is that, despite a significant slowdown in market No. 1 (not Las Vegas, as the company's name implies, but the Chinese gambling enclave of Macau), the company saw strong growth in its attributable net income. In Q4, this came in at 25%, to $721 million in spite of a 7% drop in net revenue (to $3.4 billion).
LVS Net Income (Quarterly) data by YCharts
The reason? In a word, Singapore. Las Vegas Sands' No. 2 market in Asia performed spectacularly during the quarter, with an explosive rise in operating income by nearly 160% on a year-over-year basis to $427 million. This more than offset the performance of the company's properties in Macau, which have been negatively affected by a Chinese government crackdown targeting the once-lucrative VIP segment of gamblers.
Las Vegas Sands has adjusted to the current realities of Macau; the company hasn't done too badly there thanks to its offerings for the mass market. More help will arrive with the opening of Parisian Macao, the firm's sprawling new resort slated to open next year that targets the segment.
So the company's payout looks sustainable, although with those stiff winds blowing in Macau I wouldn't expect another 30% hike in the near future. But once the company's recovery from the VIP business gathers steam, and the Parisian Macao opens its doors, that'll probably change quickly.
Las Vegas Sands' upcoming payout will be dispensed on March 31 to stockholders of record as of March 23.
Potash Corp. of Saskatchewan (POT +0.00%)
This supplier of the namesake crop nutrient (among other materials) loves raising its quarterly dividend. So much so that it's cranked it higher, on a split-adjusted basis, more than 10-fold since 2010. Its latest raise is relatively modest; a 9% increase to $0.38.
These frequent hikes aren't reckless or ill-considered. Potash Corp. has been doing very well on the back of strong demand for the nutrients it sells; its net margin consistently hovers in the 20% neighborhood.
POT Profit Margin (Quarterly) data by YCharts
As a result, the company usually generates more than enough cash from its operations to cover those rising dividends... even while spending considerably on an ambitious expansion program, as my Foolish colleague Tyler Crowe wrote in a recent analysis.
Potash Corp. is a very steady performer that manages its business well. I think it'll continue to pay a dividend, and raise it on the occasions when it has the means to do so.
The firm will hand out its enhanced distribution on May 5 to shareholders of record as of April 13.
HCP (HCP +0.12%)
This specialty real estate investment trust concentrates on the leasing of various types of medical facilities. This is a thriving business, as evidenced by the latest in a very long series of dividend raises from the firm. It's lifted its quarterly payout by 4% to just under $0.57 per share.
HCP is a dividend aristocrat, one of the handful of companies that has raised its distribution at least once for a minimum 25 years in a row.
That's no small achievement, particularly considering its relatively tight focus and the many swings in interest rates over the years (REITs are particularly sensitive to rate changes, as much of their funding comes from fixed-income instruments -- this can affect the profitability of their assets, such as leased property).
HCP Dividend data by YCharts
HCP is arguably the REIT best positioned to benefit from the graying of America, i.e. the rapidly aging (and very large) baby boomer demographic. It's clearly managing its business very well, with annual top and bottom lines showing a pronounced upward tilt over the past five years, and net margins that have landed in the 40%-45% range recently.
As such, there's no reason to suspect that the REIT's impressive history of dividend raises is in imminent danger of ending anytime soon.
HCP's new dividend is to be paid on Feb. 24 to stockholders of record as of Feb. 9.
