Four Reliable Dividend Payers Boosting Distributions

Connecticut Water Service Inc (NASDAQ:CTWS), together with its subsidiaries, operates as a regulated water company. The company operates through three segments: Water Operations, Real Estate Transactions, and Services and Rentals. The company raised its quarterly dividend by 5.60% to 28.25 cents/share. This marked the 47th consecutive annual dividend increase for this dividend champion. The ten year dividend growth rate is 2.20%/year. However, the dividend growth seems to be accelerating slightly over the past few years. The stock is expensive, as it is selling for 23.10 times earnings and yields 2.30%. A low yield, coupled with low dividend growth and a high P/E ratio is not a winning combination when purchasing a company. On the other hand, I like the fact that water is one type of regulated industries where you have low risk of obsolescence. I am going to put the company on my list for further research, because I am always fascinated by boring industries with slow and steady returns, plus low risk of obsolescence and a regulated monopoly type business model.

Northrop Grumman Corporation (NYSE:NOC), a security company, provides systems, products, and solutions in aerospace, electronics, information systems, and technical service areas to government and commercial customers worldwide. The company raised its quarterly dividend by 12.50% to 90 cents/share. This marked the 13th consecutive annual dividend increase for this dividend achiever. The ten year dividend growth rate is 13%/year. Northrop Grumman Corporation (NYSE:NOC) is an example of why conventional wisdom and popular opinion could be dangerous to your wealth building. The company’s revenues are down by a little over 22% over the past decade, while net income has climbed from $1.5 billion to $2 billion over that time period . As we all know, military spending by the US government has been cut due to budget constraints. At the same time, earnings per share have gone from $4.37 in 2006 to $10.39 in 2015 while dividends per share went from $1.16 to $3.10 during the same time period. This excellence was achieved through share buybacks at the time where the stock has a lower valuation. That being said, I think that the stock is fully valued at 20 times forward earnings and a dividend yield of 1.70% today. Given the high valuation, I do not expect that buybacks at the present time will have the necessary impact that they had when the P/E was lower.

Full Disclosure: Long CLX