These Stocks Just Raised Their Dividends

The House of Mouse provides a bit more cheddar to its shareholders, while a specialty REIT and an aristocratic steelmaker also enhance their payouts.

Eric Volkman
Eric Volkman
Dec 8, 2015 at 8:39AM
Investment Planning

Are you, like millions of people on our planet, still procrastinating about holiday gift-buying? Well, if you're looking for both stocking- and portfolio-stuffers, here are a few issuers that increased their values by raising their dividends last week.

This year has generally been a good one for income investors, with a host of stocks bumping their distributions. We seem to be rounding out 2015 with a burst of fresh hikes; here's hoping that will continue, with other stocks spreading the holiday cheer.

Walt Disney
The little mouse is a big animal in Hollywood. And Disney (NYSE:DIS) is making more than a tiny squeak with its semi-annual payout, having just lifted it by 8% to $0.71 per share.

Times are mostly good for Disney, with all but one of its five business units posting year-over-year gains in both revenue and operating income in the most recently reported quarter. All in all, Disney's consolidated revenues rose by 9% to $13.5 billion for the period, while net income climbed by 7% to $1.6 billion.

DIS Revenue (Quarterly) Chart

DIS Revenue (Quarterly) data by YCharts

This quarter and next will likely be smashing ones for the company, as the world is holding its collective breath to see the House of Mouse's first Star Wars film. (Disney bought Lucasfilm in 2012.)

Not everything is as rosy, though. The company's prize TV asset, ESPN, is losing subscribers to the tune of around 7 million over the past two years. That could sap growth in its media networks (i.e., television) segment, Disney's top unit in terms of revenue. Investors should keep an eye on if and how the company is able to reverse this trend.

That said, Disney's still on a roll, and it throws off an awful lot of cash. Free cash flow was nearly double what the company paid out in dividends, so that distribution is not only safe, but an excellent candidate for a fresh raise come the next declaration.

Disney's next payout will be dispensed on Jan. 11 to stockholders of record as of Dec. 14.

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CoreSite Realty
Certain corners of the real estate investment trust sector are reliably lucrative: Providing space to data centers is one. In evidence of the this, witness CoreSite Realty (NYSE:COR), which has declared a 26% hike in its quarterly dividend to $0.53 per share.

This is a good habit the company's fallen into. Since the year it paid its first dividend, it has increased the distribution substantially every year around this time.

As a REIT, CoreSite Realty is basically obligated to distribute nearly all of its profit in the form of dividends. Happily for investors, our increasingly connected world needs data centers, and as a result, the company's top and bottom lines have been improving nicely since its 2010 IPO.

That momentum is continuing: In the most recently reported quarter, the REIT's revenue rose by 23% on a year-over-year basis, to $87 million. Funds from operations, an key profitability metric for REITs, advanced 35% to $0.74 per diluted share.

COR Revenue (Quarterly) Chart

COR Revenue (Quarterly) data by YCharts

If anything, demand for data centers is only increase in the near future. As a top publicly traded REIT active in the sector, CoreSite Realty is sure to benefit. I believe that future double-digit raises in the dividend are a strong possibility for this company.

CoreSite Realty's upcoming dividend will be paid on Jan. 15 to stockholders of record as of Dec. 31.

This steel company is our dividend aristocrat for this installment. For those unfamiliar with the term, the aristocrats are an elite group of stocks that have raised their dividends at least once annually for a minimum of 25 years running. Last week, Nucor (NYSE:NUE) extended its streak to 43 years with a quarter-cent raise to $0.375 per share.

That isn't a big bump at all, but we shouldn't be shocked. After all, it comes at a time of weakened prices and tough competition in the American steel industry.

To its great credit, ever-nimble Nucor has done a good job in the face of such adversity. In its most recent quarter, it blew past both the market's and its own estimates, netting $227 million ($0.71 per share) on sales of $4.2 billion. The former number was down only modestly on a year-over-year basis, an encouraging result given the circumstances.

NUE Revenue (Quarterly) Chart

NUE Revenue (Quarterly) data by YCharts

Meanwhile, the company's free cash flow continued to be robust in Q3 at $455 million -- several times higher than the $120 million it paid out in dividends.

Nucor's doing very well considering the current state of its industry, and it's an interesting play for income investors. As far as the payout is concerned, I think it'll stay aristocratic with at least incremental annual raises going forward.

Nucor's newly raised dividend will be dispensed next Feb. 11 to stockholders of record as of this Dec. 31.