Top 8 Companies to Invest in 2012 that Increasing Dividends

Volatility in the equity markets is back, as stocks continue their quick reactions to the myriad news events and developments coming out of Europe. Sharp selloffs and big price spikes occurred throughout the week, much to the delight of swing traders.
For investors, and particularly for income investors, the week also saw some very big names boosting their payouts to shareholders, including several large retail and industrial firms. Eight companies made it onto our Companies Increasing Dividends list this week. Here they are:

Top 10 Dow Dividend Stocks

As the largest owner of life science real estate, Top 8 Companies to Invest in 2012 that  Increasing Dividends - Alexandria Real Estate Equities (NYSE:ARE) collects big rents from its tenants. This week, the REIT returned some of that rent to shareholders in the form of a 4% increase in its quarterly dividend to 51 cents per share. The new payout will be made on July 16 to shareholders of record as of June 29. The new dividend yield, based on the June 12 closing price of $69.36 (the day the dividend was announced), is 2.94%.
Convenience market operator Casey’s General Stores (NASDAQ:CASY) stocked shareholder shelves with a 10% higher quarterly payout to 16.5 cents per share. The dividend increase came despite quarterly earnings that missed Wall Street estimates. The new dividend is payable Aug. 15 to shareholders of record as of Aug. 1. The new dividend yield, based on the June 12 closing price of $59.91, is 1.1%.
Iconic construction and mining equipment maker Top 8 Companies to Invest in 2012 that  Increasing Dividends - Caterpillar (NYSE:CAT) dug into its fiscal mountain and unearthed a 13% higher dividend to 52 cents per share. The pumped up payload will be delivered on Aug. 20 to shareholders of record as of July 20. The new dividend yield, based on the June 13 closing price of $85.29, is 2.44%.
Medical device maker and Dependable Dividend Stock Top 8 Companies to Invest in 2012 that  Increasing Dividends - C.R. Bard Inc. (NYSE:BCR) sells products for vascular, urology and oncology applications. This week, the company fashioned a fiscal device for shareholders that boosted its payout 5% to 20 cents per share. The new dividend is payable Aug. 3 to shareholders of record as of July 23. The new dividend yield, based on the June 13 closing price of $99.44, is 0.8%. C.R. Bard has been paying dividends every year since 1960.
Diversified energy provider Top 8 Companies to Invest in 2012 that  Increasing Dividends - DTE Energy (NYSE:DTE) serves clients in the state of Michigan, and this week the Great Lakes-based company moved to add more fiscal water to shareholders’ ponds. The new dividend of 62 cents per share represents a 5.5% boost from the prior quarterly dividend. The new payout will be made Oct. 15 to shareholders of record as of Sept. 17. The new dividend yield, based on the June 14 closing price of $59.47, is 4.17%.
Industrial controls manufacturing giant Rockwell Automation (NYSE:ROK) turned up the dial on its quarterly dividend, lifting its payout 11% to 47 cents per share. The newly increased dividend is payable Sept. 10 to shareholders of record as of Aug. 13. The new dividend yield, based on the June 8 closing price of $69.87, is 2.69%. Separately, the company’s board approved the addition of $1 billion to its share repurchase program. This is in addition to the previous buyback authorization of $1 billion.
Cheap-chic retail behemoth Top 8 Companies to Invest in 2012 that  Increasing Dividends - Target (NYSE:TGT) increased the price it pays to shareholders by 20% to 36 cents per share. The new dividend price tag will be marked up on Sept. 10 to shareholders of record as of Aug. 15. The new dividend yield, based on the June 13 closing price of $58.05, is 2.48%. This payout represents the 180th consecutive quarter the company has paid dividends since it went public in 1967, putting it squarely on our list of Dependable Dividend Stocks.
Industrial conglomerate Top 8 Companies to Invest in 2012 that  Increasing Dividends - United Technologies (NYSE:UTX) is the parent company of jet engine maker Pratt & Whitney, Otis elevator, Sikorsky Aircraft and several other companies. This week, the diversified firm declared a new quarterly dividend of 53.5 cents per share, which represents an 11.5% increase over the prior payout. The new dividend will be delivered Sept. 10 to shareholders of record as of Aug. 17. The new dividend yield, based on the June 13 closing price of $73.54, is 2.91%.

3 Best Stocks to Invest for May in 2012

Are you familiar with the “coffee-can portfolio”?
In short, it was a simple way to invest for the long term developed by Bob Kirby, the late chairman of the Capital Group. Investors would buy the stocks of excellent companies, putting the stock certificates of those companies in a coffee can, never to be touched again — eliminating transaction costs and taxes.
In other words, it was buy-and-hold taken to the extreme.
Well, Morningstar took that concept in June 2005 and created its own coffee-can portfolio of 10 stocks chosen based on the discount to estimated fair value. As of April 5, 2012 the coffee-can portfolio was up 39% versus 33% for the 3 Best Stocks to Invest for May in 2012 SPDR S&P 500 (NYSE:SPY). While it’s not a huge difference, it’s enough to demonstrate that buy-and-hold investing, when done properly, still is a good idea.
However, a few of the coffee-can stocks seem a little stale. Of the original 10 stocks, three seem questionable: 3 Best Stocks to Invest for May in 2012 Federated Investors (NYSE:FII), 3 Best Stocks to Invest for May in 2012 Fifth Third Bancorp (NASDAQ:FITB) and IAC/Interactive (NASDAQ:IACI). I suggest replacing them with three new stocks, creating a modified version of Morningstar’s coffee-can portfolio. And from time to time, we’ll keep up on both the modified portfolio’s performance and the original, using April 9 as the start date.
Let the games begin.
3 Best Stocks to Invest for May in 2012 Franklin Resources
Barron’s published a favorable article March 31 extolling the virtues of Franklin Resources‘ (NYSE:BEN) asset diversity. With a good mix of equity (40%), fixed income (44%) and hybrid investments (15%) comprising the $670 billion in assets under management, clients are given asset allocation flexibility very few managers can match.
This flexibility has enabled it to attract clients from outside the U.S. About one-third of the $670 billion is held elsewhere, providing its business with geographic diversification as well.
With one of the strongest global retail-distribution networks anywhere, Goldman Sachs analyst Marc Irizarry believes BEN deserves more of a premium. Most importantly, its funds have a long-term track record second to none, finishing first in Barron’s most recent ranking of fund families. Considered smart allocators of capital, it paid a special dividend of $2 per share last December. While exchange-traded funds present a potential threat, it’s as solid an asset manager as there is, and long-term investors will be rewarded.
Morningstar currently gives Franklin Resources a fair value estimate of $145 — a 16% premium to its April 9 share price of $124.81. Its fair value estimate for Federated Investors, on the other hand, is $19 — a 15% discount to its April 9 stock price of $22.42.

U.S. Bancorp

3 Best Stocks to Invest for May in 2012 Berkshire Hathaway (NYSE:BRK.B, BRK.A) owns 78 million shares (4.1% of the outstanding) in U.S. Bancorp (NYSE:USB), the fifth-largest commercial bank in the U.S. It’s not Buffett’s biggest financial services investment — that distinction goes to Wells Fargo (NYSE:WFC) — but it does make a list of 14 stocks that Berkshire Hathaway owns with market values greater than $1 billion. That says a lot about the quality of U.S. Bancorp, in my opinion.
Buffett first acquired 23.3 million shares of the Minneapolis bank in the fourth quarter of 2006, adding 44.3 million shares the very next year and then small amounts thereafter. The fact that its book value investment at the end of 2011 was $300 million more than the market value tells me Buffett believes its intrinsic value is much higher than the average purchase price of $30.77 a share.

Liberty Interactive

Up until November, Liberty Media was comprised of three tracking stocks: Liberty Capital, Liberty Starz and Liberty Interactive. Liberty Capital and Liberty Starz were combined into 3 Best Stocks to Invest for May in 2012 Liberty Media (NASDAQ:LMCA) and it, along with Liberty Interactive (NASDAQ:LINTA), operate as two separate public companies, backed by their own assets. As a result, the tracking stocks no longer exist.
However, it seems Liberty founder John Malone couldn’t stay away from them, announcing in February that it would split Liberty Interactive into two tracking stocks; one for its interests in QVC and HSN Inc. (NASDAQ:HSNI) and the other, Liberty Ventures, for its interests in 3 Best Stocks to Invest for May in 2012 Expedia (NASDAQ:EXPE), 3 Best Stocks to Invest for May in 2012 Time Warner (NYSE:TWX) and Time Warner Cable (NYSE:TWC).
At first, you have to question the wisdom of doing this after making such a big deal about getting rid of tracking stocks in the first place. However, if you consider that QVC represents a significant portion of Liberty Interactive’s revenues and profits, the separation should help investors value both pieces of the puzzle. In the end, I think QVCs international expansion will continue to drive Liberty Interactive upward, with Liberty Ventures providing some extra juice.

Top 5 Stock To Buys for May in 2012

As mentioned last month, we’ve achieved some stability in regards to which stocks remain the crème de la crème. This month, we are keeping three of our previous month’s Top 5 stocks, swapping out two, and adding five new names to our Top Stocks list.
First, our swap-out names:
Top 5 Stock To Buys for May in 2012 Alexion Pharmaceuticals (NASDAQ:ALXN), and Top 5 Stock To Buys for May in 2012 McDonald’s (NYSE:MCD). Both of these stocks are still A-rated buys, and they are  held in high regard, but I’m substituting in two other consumer-driven stocks that have even better top- and bottom-line prospects. With consumer confidence and spending on the rise, you’ll want to get a piece of these companies that have stunning track records of accelerating sales growth.
Now let’s move to our additions:
As the leading auto parts chain in the U.S., AutoZone (NYSE:AZO) is known for helping its customers “Get in the Zone.” And lately, more and more people have been going to AutoZone to keep their cars running longer. This trend is most clearly shown in AutoZone’s quarterly same-store sales results, which have been steadily increasing over the past few quarters.
In the most recent quarter, the company’s same-store sales grew 5.9%, which accelerated from the prior quarter’s 4.6% gain. Another thing I love about this stock is that it has a solid history of share repurchase programs. A few weeks ago, management announced that the company is buying back an additional $750 million in its stock. The company is clearly committed to returning value to its shareholders.
Top 5 Stock To Buys for May in 2012 #1 Dollar General Corporation (NYSE:DG) is another retailer that has benefited from the recent wave of frugality that has hit the U.S. With just under 10,000 stores nationwide, the company offers a wide range of discount goods for $10 or less. I’m keeping both Dollar General and Dollar Tree on the Top 5 because they both serve two complementary but different functions as bargain retailers.
As it stands, Dollar General boasts better earnings growth (the second-best in the industry, in fact), while Dollar Tree has a better track record with its sales growth. Dollar General is also larger and has a slightly lower Price/Earnings ratio.
Top 5 Stock To Buys for May in 2012 #2 Dollar Tree (NASDAQ:DLTR) is slightly smaller than Dollar General, but with over 4,000 stores across the United States, it is the most successful single-price-point retailer in the nation. Towards the end of February, the company reported strong sales and earnings growth for the fourth quarter. Compared with the same quarter last year, net income climbed 16% to $187.9 million, or $1.60 per share, which was largely in line with the $1.59 per-share Street estimate. Over the same period, net sales climbed 13% to $1.95 billion, slightly topping the consensus sales estimate of $1.93 billion.
Similar to AutoZone, this company’s same-store sales have been accelerating as well. In fact, in the third quarter, Dollar Tree grew same-store sales by 4.8%, and then pulled off an astounding 7.3% same-store sales growth in the fourth quarter!
Top 5 Stock To Buys for May in 2012 #3 Lorillard (NYSE:LO) is one of four tobacco stocks we liket, and it was added last issue because it is a smaller and more agile company than any of the Big 3. And, in keeping with the rest of the tobacco industry, the company recently upped its dividend payment by 19.2% to $1.55 per share! This means that LO’s dividend yield now weighs in at 4.8%. This is lower than Altria Group Inc.‘s (NYSE:MO) 5.5% yield, and Top 5 Stock To Buys for May in 2012 #5 Reynolds American Inc.‘s (NYSE:RAI) 5.4% yield, but higher than Philip Morris International Inc.‘s (NYSE:PM) 3.6% yield.
With over 1,000 stores in the U.S., Top 5 Stock To Buys for May in 2012 #4 Ross Stores (NASDAQ:ROST) is the second-largest off-price apparel retailer in the country. The company recently released its same-store sales results for February, and the results were stunning. Last month, the fashion bargain chain grew same-store sales by 9%, which positively trounced the 4.6% consensus estimate and represents a significant uptick from its 5% growth in January.
Recently, thanks to a combination of higher merchandise gross margin and lower shortage costs, Ross Stores announced strong operating results for the fourth quarter. Compared with the same quarter last year, sales climbed 12% to $2.4 billion, and net earnings jumped 19% to $192 million, or $0.85 per share. These are solid results, as the retailer was able to accelerate earnings despite difficult year-over-year comparisons. Ross Stores continues to be a top off-price apparel retailer due to its ability to offer unbeatable brand-name bargains while maintaining lower store inventories. And the great thing is that the best is still yet to come.
Historically, March and April represents a strong sales season for Ross Stores, and management is hopeful that the company will continue to improve in the coming months.