Value Investing News

Stanley Black & Decker Inc. is a diversified global provider of hand tools, power tools and related accessories and systems resulted from the March 2010 merger of StanleyWorks and Black & Decker. Linked here is a detailed analysis and commentary.

Have you noticed that investing in dividend growth stocks has gone main stream? What a change from a couple of years ago when dividends were considered "stodgy, for old people, yawn, boring!" With its new found attention, dividend growth stocks aren't disappointing their newly acquired fans. When all is said and the last word is written, 2011 was a great year for dividends!

Most CEOs give lip-service to their commitment to shareholders, but what happens when times are hard. When the economy turns down and the future looks bleak, will the company hoard cash and stop its dividend or put action behind its words? The key to successfully selecting dividend growth stocks is the ability to identify companies that will not only maintain but grow their dividend.

Over the last several years many companies have chosen to not raise their dividend, while some decided to cut their dividend and some even decided to stop paying a dividend. In some cases their financials did not warrant the change. As investors in dividend growth stocks, we want to look for companies with a positive dividend culture.

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The latest 10-K filing by STANLEY BLACK & DECKER, INC.

There are income investors and Dividend Growth investors. While the distinction is rather simple, it slips past many casual observers. Income investors are investing for maximum current income, while dividend growth investors are looking to maximize income over an extended period of time — usually sacrificing current income for potential greater future earnings.

Dividend stocks are sometimes referred to as defensive stocks since many investors flee to them in an economic downturn. Their dividends, if sustainable, provide a minimum level of positive return. This cushions the downward pressure from the market. Better yet, great dividend companies not only sustain their dividends in a downturn – they actually raise them.

Twelve companies raised distributions last week. I have highlighted each company below with brief information as a starting point for further research. Stocks that raise distributions have managed to outperform the S&P 500 over the past four decades, which is one of the many reasons to consider them for my dividend portfolio.

Over the last couple of years we have seen companies fail to raise their dividend, cut their dividend and some even decided to stop paying their dividend. In some cases their financials did not warrant the change. So, how do you fin companies with a positive dividend culture?

The Stanley Works manufactures tools and engineered security solutions worldwide. The company, which has raised dividends for 42 consecutive years, is a member of the S&P Dividend Aristocrats index.

Since 1999 this dividend stock has delivered an average total return of 8.10% annually.

The dividend aristocrats list includes companies which have increased dividends for over 25 years in a row. It is equally weighted and re-balanced once an year. Over the past 3,5 and 7 years the index of elite dividend stocks has managed to outperform the S&P 500 by 5%, 3.7% and 4.40% respectively.