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Published: November 17, 2009
Only 313 U.S. companies have increased
sales every year for the past decade. These are companies that
have improved every year since 1999 -- growing through three
presidents and two bear markets.
Some of the biggest names that have pulled off this financial
feat include Wal-Mart (NYSE: WMT), Amazon.com (Nasdaq: AMZN) and
Medtronic (NNYSE: MDT). Most of these companies don't pay enough
in dividends -- or any in Amazon.com's case -- to make the final
cut for serious income investors.
Thirteen of the 313 U.S. companies pay more than 6%.
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Even with a decade of stellar earnings growth behind it, this
list is full of landmines. American Church Mortgage Company's
nearly 20% yield, for example, isn't very secure. In the past 12
months, the company has paid out more than twice what it has
earned, making this company's dividend endangered.
Several others are worse. IRET, SUI, EPR, WRE, PVR, and BPL all
paid out more than twice what they earned during the past twelve
months.
Even though Empire District Electric (NYSE: EDE) has paid
out slightly more in dividends than it has earned during the
past 12 month, it's the winner in this category. A payout ratio
of 108%, in the short-term, isn't too concerning, especially
when it's a public utility monopoly that has the states it
operates in on its side.
The company is currently seeking rate increases in several of
its coverage areas that will help fill that gap. Earlier this
month, it filed a request with the Kansas Corporation Commission
to hike electricity rates in Kansas by nearly 25%. And at the
end of October, the company filed a request with the Missouri
Public Service Commission to hike electricity rates nearly 20%.
While customers won't be pleased with any hike, they'll have to
find a way to deal with them as there are few other prospects,
none of which are more agreeable than installing a wind turbine
on the roof.
Based in Joplin, Missouri, the Empire District Electric is a
century-old $661 million company that provides electricity,
natural gas, or water services to some 215,000 customers in
Missouri, Kansas, Oklahoma, and Arkansas. Its seven power plants
can produce 1,255 megawatts of power for the 121 cities it
provides electricity to.
The company pays $0.32 per share quarterly for a total of $1.28
yearly. At current prices around $18, it equates to a yield of
7%. It has maintained its dividend at this level since 1992 and
has continuously paid dividends since 1944.
This is not an exciting stock. With a beta of 0.76, it's
significantly less volatile than the S&P 500. But over the past
decade it has outperformed the S&P by +44 percentage points.
The company's next $0.32 per share dividend will be paid on
December 15, 2009 to holders of record as of December 1, 2009.
The company offers a dividend reinvestment program through Wells
Fargo Bank that provides a 3% discount to the three day average
trading price preceding the dividend payment date. For more
information on this program, call 800-468-9716 or visit
this
link.
Today, the company is attractively valued. It has a price to
earnings of 15.3, a price to book of 1.2, and five-year price to
earnings growth of 2.5. With a decade of steady sales growth,
this company is positioned to keep pushing out its dividend in
nearly any situation.
-- Anthony Haddad
Staff Writer
StreetAuthority |
