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.
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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