2 Equities Offer Rising Dividends and 2.2%-Plus Dividend Yields
By: Ned Piplovic,
A regional bank from the U.S. Northwest and a global health care and nutrition products manufacturer have rewarded their investors with rising dividends for several consecutive years, along with yields of more than 2.2% and asset appreciation of around 30% for the past 12 months.
While both companies cut their dividend distributions once over the past two decades, they managed to boost their annual dividend payouts consistently before and after those dividend cuts. The ex-dividend date for one of the companies is in late June with a mid-July pay date and the ex-dividend for the other company in mid-July with a mid-August pay date.
Umpqua Holdings Corporation (NASDAQ:UMPQ)
Umpqua Holdings Corporation engages in commercial and retail banking, as well as the retail brokerage businesses in the U.S. Northwest. The banking operation is divided into the Community Banking and Home Lending segments. While the Home Lending segment originates, sells and services residential mortgage loans, the Community Banking segment provides various loans and standard deposit products, such as checking accounts, savings accounts, money market account and certificates of deposit to business and retail customers. Additionally, this segment offers financial planning, trust and investments services to high net worth individuals, as well as retail brokerage and investment advisory services. Founded in 1953, the company is headquartered in Portland, Oregon.
The company’s current quarterly dividend is $0.16, which is equivalent to a $0.64 annual distribution and a 2.2% dividend yield. Between 1999 when the company started paying a dividend and 2003, the company paid a flat annual dividend of $0.16 per share.
In 2004, the company started hiking its dividend every year. The annual dividend payout rose almost five-fold by 2008. However, the bank cut its dividend in 2009 almost 75% amid the financial crisis and repeated the same dividend the following year.
However, Umpqua Bank resumed its annual dividend hikes in 2011 and has tripled its annual distribution since then because of a 21.3% average annual growth rate over that period.
The share price traded flat around $15.00 from June to the end of October 2016 before jumping 28% to reach its 52-week high by early December 2016. Between November 2016 and mid-April 2017, the share price lost more than 11%, However, the price recovered fully and is trading back in 52-week peak territory as of June 19, 2017.
Abbott Laboratories (NYSE: ABT)
Founded 1988 and headquartered in Chicago, Abbott Laboratories manufactures and sells medical diagnostics systems, medical devices, nutrition products and branded generic pharmaceuticals. The company operates in more than 150 countries through Established Pharmaceutical Products, Diagnostic Products, Nutritional Products and Vascular Products segments. While most of Abbott Labs revenue is generated through its commercial medical equipment and supply segment, in the consumer market the company is best-known as the manufacturer of Similac infant formula, as well as nutritional and health products under the Ensure, Pedialyte, PediaSure, Glucerna and EAS Sports Nutrition brands. Additionally, the company provides blood and flash glucose monitoring systems – including test strips, sensors, data management decision software – accessories for people with diabetes, and medical devices for the eye, such as cataract and LASIK surgery, contact lens care and dry eye products.
The company’s current quarterly dividend of $0.265 is equivalent to a $0.64 annual payout and a 3.4% dividend yield. In 2013, the company cut its annual dividend by almost 75%. However, in the 15 years prior to the 2013 dividend cut, ABT boosted its annual dividend payout by an average annual growth rate of almost 10% every year.
Since the 2013 dividend cut, the company has resumed its rising dividends record. Over the past four years, the company doubled its annual dividend with annual boosts averaging 17.3%. If the dividend hikes continue at the same rate, the annual dividend payout would be back to its pre-2013 drop level in four more years.
The share price rose 20% between mid-June and the beginning of August 2016. However, the share price dropped quickly back to mid-June- 2016 levels by the end of November. Since November 2016, the share price rose 30% and reached its new all-time high. As of June 19, 2017, the share price is trading near $49, which is 33% higher than the same time last year and 72% higher than five years ago.
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Ned Piplovic is the assistant editor of website content at Eagle Financial Publications. He graduated from Columbia University with a Bachelor’s degree in Economics and Philosophy. Prior to joining Eagle, Ned spent 15 years in corporate operations and financial management. Ned writes for www.DividendInvestor.com and www.StockInvestor.com.