At 68.15 per cent, Equity Residential's dividend hike on Wednesday is the biggest of the stocks we're looking at this week. The move brings this REIT's yield up to 4.24 per cent.
Cleaning and sanitizing product maker Ecolab is another name that hiked its payout to shareholders in the last week and change. The company announced a 14.3 per cent dividend increase last Thursday, bringing its payout to 20 cents per share.
While the firm's 1.44 per cent yield hardly makes it a core-income holding, it's important to remember that payouts aren't static: Ecolab increased its dividend consistently during the recession.
Ecolab is the league leader in the cleaning and sanitation product business -- if you've been to a restaurant or hotel lately, there's a very good chance that Ecolab's products are sitting in the supply closet. The fact that customers are willing to pay a lot for sanitation is also important; cleaning products make up a very small chunk of a restaurant's costs, but they contribute a major part of its reputation. As a result, Ecolab retains more pricing power than most commercial vendors.
There's considerable room for Ecolab to expand internationally, particularly in emerging economies, where sanitation mandates are only just starting to catch up with Ecolab's existing markets. If the company can spend the resources on growing its base internationally, that investment should pay off considerably in the next several years.
Aetna , one of TheStreet Ratings' top-rated managed health care stocks, is the third-largest managed care organization in the country, providing health care benefits for more than 35 million Americans. That size gives Aetna the ability to heft its weight around when negotiating with healthcare providers, a necessary bit of leverage in an increasingly cost-conscious industry.
A recently activated provision of the recent health care reform legislation means that insurers are now required to pay out a minimum portion of premiums on subscriber care. While the move doesn't impact Aetna as much as some other peers, it certainly puts added pressure on operating efficiency for the healthcare industry.
Like most insurers, Aetna has a large benefits-plan-management business where the company collects fees in exchange for administering companies' own insurance programs. That business could become increasingly important for Aetna, particularly as legislation and market risk to the firm's massive portfolio weigh on investors. Aetna's scale makes the firm one of the best candidates to embrace the fee-based business more fully.
Last Friday, Aetna increased its quarterly dividend by 16.67 per cent, a move that ratchets the firm's payout to 17 cents per share. That's a 1.74 per cent yield at current price levels.
It's been a tough year for shares of Ameriprise Financial . Dragged down by weakness across the financial sector, the firm's stock has shed approximately 20 per cent so far this year.
If there's any silver lining in that statistic, it's the company's dividend payout: On Wednesday, management announced a 21.74 per cent increase in its dividend. That brings Ameriprise's yield up to 2.46 per cent.
Ameriprise is a diversified financial services firm with its hand in everything from asset management to insurance to financial planning. The key to this stock is the fact that it carries reasonably limited risk for the sector -- insurance lines carry lower leverage than most peers, and the balance of the firm's revenues come from fee-based businesses. For investors looking for exposure to the financial sector without the excessive balance sheet risks of most options, Ameriprise offers a good alternative.
In recent years, the company has been growing its asset management business, most notably with the acquisition of Columbia Management in 2009. With considerably less manager stickiness among investors, Ameriprise could benefit from good timing if it can set itself apart from rivals.
Roper Industries , one of TheStreet Ratings' top-rated electrical equipment stocks, is a diversified manufacturer that operates in a wide array of businesses, including medical devices, energy control systems, and radio frequency products. While those businesses may be disparate, they do provide considerable exposure to the industrial sector, something investors should consider if they're concerned about cyclical stocks.
Historically, free cash flows have helped to fund Roper's acquisition strategy in a big way, resulting in a firm that has a manageable debt load and ample balance sheet liquidity, two factors that'll help shareholders' peace of mind on the next cycle downswing. A very large chunk of recurring revenues make this firm stand out even more from other manufacturing names -- even if its dividend payout doesn't.
While management increased its dividend by 25 per cent on Wednesday, Roper's yield is just 0.66 per cent. Despite the paltry payout, the fact that Roper uses its cash internally on growth is a good reason for longer-term investors to keep this stock in mind.
Jonas Elmerraji is a contributor to numerous financial outlets, including Forbes and Investopedia.
- Bristol-Myers Squibb Co$71.15+0.37(+0.52%)
- Stryker Corp$110.12+1.53(+1.41%)
- Equity Residential$70.73+0.29(+0.41%)
- Ecolab Inc$115.04-0.27(-0.23%)
- Aetna Inc$113.87+0.81(+0.72%)
- Ameriprise Financial Inc$93.17-0.86(-0.91%)
- Roper Technologies Inc$174.37+0.76(+0.44%)
- Updated May 5 4:00 PM EDT. Delayed by at least 15 minutes.