| Company | Ticker | Dividend Increase | Forward Yield* |
| Corrections Corp America | (NYSE:CXW) | 165% | 5.73% |
| Texas Instruments | (NASDAQ:TXN) | 33% | 3.45% |
| Parkway Properties | (NYSE: PKY) | 33% | 3.39% |
| Infinity Property and Casualty | (NASDAQ:IPCC) | 33% | 2.06% |
| Public Storage | (NYSE:PSA) | 14% | 3.29% |
*2013 dividend yield based on current price
Sin Stocks Pay Dividends
It’s always good to have a sin stock in your portfolio, whether it is tobacco, alcohol, or perhaps those in corrections. These are secular investments that will grow or remain steady regardless of the economy. Sin stocks in particular have to fight politicians, regulatory challenges, etc. to remain operational. There aren’t too many industries in the market that could survive the backlash of the tobacco or alcohol industry, or that of corrections. Corrections Corp. of America falls under this category, as an owner and operator of privatized correctional facilities, and the company just announced an unprecedented dividend boost.
The company just recently implemented its dividend, and has since rallied almost 60% in the last year. This is a company that has grown each of the last five years, is profitable, and operates with a debt-to-assets ratio that is consistent with the rest of its industry. The company is fairly valued, and might make a good long-term addition to your portfolio due to its consistency and high payout.
Dull & Boring is Good….. When it Pays Dividends
Texas Instruments rallied almost 5% after announcing earnings that barely beat expectations. However, the stock’s rise was not related to earnings, but rather an unprecedented 33% rise in its dividend. The company has now declared a $0.28 quarterly payout, which is a 180% premium over the last five years.
TXN is in some ways a secular technology company, a stock that has traded somewhat flat over the last five years. The company has what many would call “old technology,” yet the company has managed to stay fundamentally consistent and is now a great investment for those seeking consistent returns. The company also returns an excess of capital to its shareholders and by returning such high levels of capital, Texas Instruments is a far better investment than any bond you can find.
Making a Post-Recession Comeback with A High Yield
Parkway Properties is a real estate investment trust with office properties in higher growth submarkets in the Sunbelt region of the United States. It is a small $1 billion company that knows how to take care of its investors with large returns of capital. Since Q2 of 2010 the company has more than doubled its dividend; this coming after a near collapse during the housing crisis.
In a market where investors are trying diligently to snatch up real estate holdings, Parkway Properties remains somewhat under-the-radar. The company itself is cyclical and needs a strong housing market in order to succeed. However, with a forward P/E ratio of under 13.0 and a housing market on the rise, this could be a great high yield investment for many years to come.
Market Leading Returns to Shareholders in Dividends
A yield of 2.06% may not sound too exciting, but when you consider the fact that Infinity Property and Casualty Corp. (NASDAQ:IPCC) has increased its dividend almost 200% in the last five years you can see why it may be a good investment. This is a small insurance play, a company that has increased its revenue from under $900 million to $1.2 billion in the last three years, which is faster than the rate of growth for this industry. The small cap stock has continued to return capital to shareholders, and remain somewhat unnoticed. Compared to fundamentals it is a very cheap growth stock, and might be a good addition to a portfolio.
Expensive But Effective High Yield Stock
Public Storage is another secular company that typically remains consistent regardless of the economy. It’s a company involved in the acquisition, development, ownership and operation of self-storage facilities, which has been a good market since the recession with property rentals being so high. The company has seen a massive increase in valuation over the last four years and is currently seeing both growth and an increase in margins.
The stock has increased by more than 170%, yet what’s encouraging is that it maintains a yield of 3% by increasing the payout frequently. This is a very expensive stock, with a price/sales of almost 14, but is a company with operating margins of almost 50%. While I do believe there are better values in the market, it’s hard to deny the stock’s resiliency over the last few years.
Conclusion
Each of these companies made big-time dividend related news in a market where most companies elect to keep more cash on balance sheets and give less back to shareholders. In my book, Taking Charge With Value Investing (McGraw-Hill), I talk in detail about “new age” diversification and finding companies that are shareholder friendly in both the secular and cyclical spaces. All of these stocks would make good additions to a portfolio, as companies with stability, growth, and returns that will bode nicely over the next few years.
The article Five Stocks With Big-Time Dividend-Related Headlines originally appeared on Fool.com and is written by Brian Nichols.
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