2 Securities Offer 3.5%-Plus Yields and Continue Annual Dividend Boosts
By: Ned Piplovic,
Two securities offer their investors dividends of more than 3.5% and a track record of boosting their dividends for the past four consecutive years.
Additionally, the yields of these two equities are 10% and 211% higher than the straight average yield for the financial sector. The ex-dividend dates are coming up shortly on July 6, 2017 and July 13, 2017, with pay dates separated by only three days in late July.
First Bancorp, Inc (ME) (NASDAQ:FNLC)
Founded back in 1864 and headquartered in Damariscotta, Maine, the First Bancorp, Inc. operates as the holding company for First National Bank, which provides a typical range of banking products and services in coastal and eastern Maine. The company offers the customary selection of deposit accounts as well as personal, residential and commercial loan products. In addition, the company offers private banking, financial planning, investment management and trust services to individuals, businesses, non-profit organizations and municipalities. The First National Bank operates through 16 full-service banking offices in Lincoln, Knox, Hancock, Washington and Penobscot counties. In April 2008, the company changed its name from First National Lincoln Corporation to The First Bancorp.
The company boosted its quarterly dividend 4.3% from $0.23 to $0.24 for the most recent quarter. This new quarterly distribution is equivalent to a $0.96 annual payout and a 3.5% yield. While the company paid a flat annual dividend of $0.78 from 2009 to 2013, it has not lowered its annual payout in the last two decades. After starting to boost its dividend again in 2014, the company increased its annual payout at an average of 5.3% for each of the past four years. Over the past 20 years, the company has an even better record of hiking its annual dividend distribution by a 13.5% annual average growth rate.
The share price rose almost 60% between early July and the end of December 2016. However, the share price drooped almost 20% in the first 10 days of January 2017. Since January, the share price has been trading relatively flat around $26.50. While the $27.06 closing price on June 30, 2017, is still 18.5% below the December price peak, it is almost 30% higher than last July’s price and 104% higher than it was five years ago.
Neuberger Berman Real Estate Securities Income Fund, Inc. (AMEX:NRO)
The Neuberger Berman Real Estate Securities Income Fund, Inc. is a closed-end fund that invests in a mix of income-producing equity securities of real estate investment trusts (REITs) and other real estate companies. The fund’s holdings are diversified across several types of real estate sectors, such as apartments, data centers, health care, lodging, resorts, manufactured homes, regional malls, self-storage, home financing and commercial financing.
After rising 3.5% and reaching its 52-week high in July 2016, the share price fell more than 20% to reach its 52-week low by November 7, 2016. After the November low, the share price rose slowly and recovered to early July 2016 levels by June 12, 2017. As of June 30, 2017, the share price was 0.6% higher than it was at the beginning of July 2016 and 55% higher than it was five years ago.
The monthly dividend of $0.045 converts to a $0.54 annual distribution and provides a substantial 10% yield. That yield is 211% higher than the current straight average yield of the overall financial sector. The financial and housing crisis impacted the funds dividend distribution significantly from 2008 to 2010 when the fund cuts its annual payout three years in a row. However, the fund resumed hiking its dividend in 2014. Since then, the annual payout rose at an average annual rate of 22.5% for a total increase of 125% over the past four consecutive years.
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