Dividend Increases for the week of December 26, 2011 – Yawn!
What a boring week! I debated if it was even worth reporting the ONE, yep that’s right, one company that announced a dividend increase this week. Since many companies shut down or start to close out their accounts for the year, it’s not all that surprising that this week was a bit of a YAWN.
The weekly wrap
This week’s dividend increase winner was People’s Financial Corp. (ticker: PFBX) – a small bank holding company that operates 16 banks in the Mississippi Gulf Coast area. This lightly traded (less than 2500 shares daily) company boasts 116 years of continuous operations. While the dividend pay out is a paltry 1.94% yield – the company is committed to rewarding shareholders, with a goal to return at least 35% of earnings to shareholders through the dividend payout. Be aware that when buying or selling shares that are lightly traded you will likely pay near the “ask” and sell near the “bid”. For these smaller companies, the spread, or difference between the bid and ask can sometimes be sizable – just be aware.
Even though the yield isn’t that exciting – People’s Financial is exactly the sort of stock I would look to add to a long term, buy and hold portfolio, like the Daily Dividend Investor. This company has over 100 year track record and has shown itself to be investor friendly, returning profits to the shareholders through ongoing dividends.
Because it’s so lightly traded, moving into and out of stocks like these can be tricky. There may not always be buyers of the shares and if there are, the spread on the bid/ask may be wide – which means you will pay a premium to buy the shares and /or forced to sell at a discount.
People’s Financial pays out it’s dividend on a semi-annual basis, which I consider a negative factor when looking for assets for the DDI portfolio. My goal is to create continuous passive income as quickly as possible – because of this, the People’s Financial is not a contender for the DDI portfolio at this time.
Daily Dividend Investor Portfolio Income Blow-out!
While this week was a bit of a yawner for dividend increases – the DDI portfolio finished the year stronger than even I expected as I’ll be reporting shortly in my annual income wrap-up report due out later this week.
Obviously it goes without saying, but the DDI portfolio remains unchanged this week as none of the companies reporting a dividend increase are currently members of the portfolio.
For more detailed information about all of today’s dividend increases please refer to the chart below.
As always when evaluating investment opportunities it’s important to keep in mind not only the fundamentals of the stock itself, but also how the holding entity (Limited Partnership,Royalty Trust, Master Limited Partnership, Business Development Company, Preferred Stock) may affect the way you report income on your annual tax return as well as the amount or percentage of tax you will be required to pay. Adding shares of any of these special entities to tax deferred / retirement accounts may also present additional issues.
Remember to review all of the fundamentals of any company BEFORE investing – do not simply buy a stock based on the dividend payout. If you have further questions about any stock mentioned her you should first consult with your CPA or tax planner / advisor before making any investments.