Income investors, rejoice: dividend payouts continue to get bigger for many of America’s best businesses. Investors who prefer to receive income from their stocks take those quarterly checks seriously, and for good reason. History has shown that some of the market’s best-performing stocks over long periods of time are dividend payers.
Even better are those stocks whose businesses are so rock-solid that they don’t just pay dividends for long periods of time, but actually increase their shareholder payouts on a regular basis. Thankfully for investors, as the economy slowly continues its recovery from the worst recession in decades, corporations are loosening their purse strings.
For investors looking for dividend stocks providing their investors with big pay raises, here are some under-the-radar candidates to consider.
Scarce resources, plentiful dividends
First, American States Water Co (NYSE:AWR) on May 21 said that its board of directors had approved a 14% dividend increase. The company’s new payout, $1.62 per share annualized, represents a 3% yield going forward.
American States Water Co (NYSE:AWR) is no stranger to providing its investors with healthy dividend raises. The company, which operates as a water and electric utility in California, represents the gold standard among dividend payers: American States Water Co (NYSE:AWR) has provided investors with 59 consecutive years of increases in its aggregate annual dividend, according to the company.
American States Water Co (NYSE:AWR) is a small-cap stock with only a $1 billion valuation. Clearly, the company has room to grow, and considering it provides an absolute essential product to society, would be interesting to research for both growth and income investors.
Global energy equipment maker National-Oilwell Varco, Inc. (NYSE:NOV) gave investors a gigantic dividend increase, indicative of management’s belief in the company’s performance and operating results.
Indeed, the company saw 2012 revenue and diluted EPS growth of 37% and 24%, respectively, year over year. To reward its loyal shareholders, National-Oilwell Varco, Inc. (NYSE:NOV) doubled its dividend, from $0.13 per share to $0.26 per share.
The company’s new payout, of 1.5% annualized, doesn’t quite match the roughly 2% yield available on the S&P 500 Index. However, National-Oilwell Varco, Inc. (NYSE:NOV) has increased its dividend every year since instituting its dividend program in 2009. Moreover, the company has provided much higher dividend growth than many companies in the S&P 500.
Last but certainly not least, Bristow Group Inc (NYSE:BRS), which operates helicopters for the offshore energy industry, recently gave its investors a 25% pay bump. The company’s new dividend payout of $1 per share annualized, represents a 1.5% yield at recent prices.
Bristow Group Inc (NYSE:BRS) is able to offer such high dividend growth as a result of its excellent operational performance. The company grew its adjusted earnings per diluted share by 20% in fiscal 2013, year over year, and is expecting fiscal 2014 adjusted EPS of at least $4.20.
Bristow Group Inc (NYSE:BRS) might fly within the shadows of an energy sector seemingly filled with dividend payers, with a $2.3 billion market capitalization, but the company’s smaller size and high dividend growth might provide investors market-beating returns going forward.
The Foolish takeaway
Most investors are aware that the markets have breached all-time highs. However, while dividend increases may not gather much attention, an increasing income stream is an important piece of the total return pie.
Dividends represent real returns and are a great way for management teams to signal the health of their underlying businesses. Income enthusiasts can take solace in the fact that their quarterly checks will come in, regardless of the market’s direction.
These three stocks are providing their investors with healthy pay raises and have the profits to ensure further dividend increases for many years to come. Die-hard income investors should add these stocks to their watch lists, if they haven’t already.
The article These Stocks Are Giving Investors Big Pay Raises originally appeared on Fool.com is written by Robert Ciura.
Robert Ciura has no position in any stocks mentioned. The Motley Fool recommends National Oilwell Varco. The Motley Fool owns shares of National Oilwell Varco. Robert is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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