Magic Kingdom park. Source: Disney website.

In late March, I wrote an article discussing why I didn't believe consumer conglomerate The Walt Disney Company (NYSE:DIS) was a good pick for dividend investors, although I fully acknowledged Disney as a premier growth stock. Investors have been richly rewarded for the past several years due to Disney's unbelievable share-price gains -- the stock is up more than 200% in just the past five years.

But until recently, I didn't see much reason for dividend investors to buy the stock. Disney's dividend yield barely touched 1%, which isn't a meaningful level of income. Plus, Disney was only paying its dividend once per year. The vast majority of other companies pay dividends at least twice per year, or even quarterly, which allow their investors to compound wealth much more quickly.

Fortunately, Disney has just announced changes on both of those fronts, which means income investors should feel much better about owning Disney stock. Disney is going to start paying a semi-annual dividend and in late June announced a 15% increase to its dividend on an annualized basis, paying $0.66 per share for the first six months of fiscal 2015..

Disney domination
There's little doubt that Disney is a fantastic business. It dominates its various businesses, including media and theme parks. Disney grew earnings per share by 26% last year, as all five of Disney's core businesses -- media networks, parks and resorts, studio entertainment, consumer products, and interactive -- grew revenue and operating profit.

Disney is off to a strong start in the current year. Earnings per share for the first two quarters jumped 18% year over year, again as a result of excellent performance across the businesses. Studio entertainment benefited from the hugely popular release of Marvel's Avengers: Age of Ultron. In addition, Disney genreated 12% revenue growth in its media networks division during the first half.

Disney's strong media assets include ABC and ESPN. Meanwhile, parks and resort revenue rose 7% during the first two quarters, year over year, thanks to price increases in both the theme parks and cruise line, and higher food, beverage, and merchandise guest spending, as well as higher hotel room rates. Last but not least, consumer-products revenue jumped 17% in the first two quarters thanks to strong merchandise sales of Frozen-related products.

The results indicate, once again, that Disney is a force to be reckoned with. The company has a very powerful brand and the ability to exercise tremendous pricing power. Its underlying fundamentals were never in question; now, finally, Disney is moving on its dividend.

Giving the dividend its due
Disney is doing more to align its growth priorities with its cash returns to shareholders. First, the company recently announced a strong 15% dividend increase. This takes Disney's annualized payout to $1.32 per share, which yields a more satisfactory 1.1%; prior to the dividend increase, the stock yielded less than 1%.

Moreover, the effective yield from Disney's dividend got even better due to management's decision to pay the dividend semi-annually. Previously, Disney paid its dividend once per year. Because investors had to wait so long to receive the dividend, they were missing out on the compound growth that comes from more regular dividend payments. Going forward, Disney shareholders will get to compound their dividends twice as often as before.

Disney beefs up its dividend credentials
Not too long ago, while Disney absolutely qualified as a great growth stock, its merits as a dividend stock were less than certain. Now that Disney has meaningfully increased its dividend and also gone to a semiannual dividend payment schedule, income investors will likely return to the stock.

Institutional and individual investors who maintain income-focused portfolios should now see Disney as an attractive investment opportunity. This should only help the stock price, and therefore keep growth investors happy, as well.