Dividend Aristocrats Week in Review for September 27, 2014: Two Utilities Announce Quarterly Dividends

This week saw three dividend growth stocks, including a food company, a communications company and a utility holding company announce regular dividend payments:

Hormel Foods has been growing their dividends since 1967. Photo courtesy theimpulsivebuy via flickr.com

Hormel Foods announced their 345th quarterly dividend.
Photo courtesy theimpulsivebuy/flickr.com.

Dividend Aristocrat Hormel Foods (HRL) will make its 345th consecutive quarterly dividend payment on November 14th to shareholders of record on October 20th. Investors will receive 20 cents for each share owned. Hormel produces food and meat products including Spam® and is currently expanding in the ready-to-eat meals sector. Hormel has paid a dividend since coming public in 1928 and has increased dividends since 1967. Hormel is one of only a few Dividend Aristocrats that has doubled its dividend payout over the last 5 years, going from 38 cents per share in 2009 to this year’s 80 cents per share. I expect Hormel to announce the 49th consecutive year of dividend increases in December, and to pay the increased dividend in February 2015. Hormel stock currently yields 1.59%.

Communications giant AT&T (T), which has been a Dividend Aristocrat since 2009, will pay a quarterly dividend of 46 cents per share on November 3rd to shareholders of record on October 10th. AT&T has increased quarterly dividends by a penny a share since 2008; when they announce their 31st consecutive annual dividend in December, I expect that they’ll increase it to 47 cents per share. With that low rate of dividend increases, the company’s 5-year compounded annual dividend growth rate is only 2.38%. To compensate for this low dividend growth rate, AT&T stock yields a very high 5.22% at current prices.

WGL Holdings (WGL), which provides energy to residential and commercial customers in the metropolitan Washington, D.C. area and other areas in the Mid-Atlantic region, is paying a quarterly dividend of 44 cents per share on November 1st to shareholders of record on October 10th.  WGL Holdings, which is a High Yield Dividend Aristocrat, has paid common stock dividends for more than 163 years and increased them for 38 consecutive years. The company increased the dividend by 4.8%, from an annualized $1.68 to $1.76 per share in February 2014. Like most utilities, WGL pays a relatively high yield of 4.19% at current prices.

There are over 50 S&P 500 companies that have increased dividends for more than a quarter century.  See the full list of S&P Dividend Aristocrats.

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