Three Companies with Sustainable Dividends

growthEven in soft economic environment, there are companies out there that are continuing to increase dividends for their shareholders. While dividend increase is good, it is more critical to make sure we understand that companies can sustain their dividends. Following are four companies that recently announced their quarterly results and increased dividends.

Brady Corp (BRC): It is a dividend achiever and has paid increasing dividends for last 24 years. Most recent dividend increase of 2.9% was in September 2009.

The 4Q09 earning per share was $0.37 (vs. $0.64 in 4Q08).

  • The key highlight was $127million cash flow from operations.
  • For year 2009, EPS was $1.33 (vs. $2.41 in 2008) which includes all restructuring charges.
  • The 2010 earnings expectation is $1.60 to $1.80.
  • Yearly dividend of $0.70/share appears to be well covered with earnings.
  • This payout ratio is at 47% and current dividend yield is 2.30%

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