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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Dover Corporation – Stock Analysis Shows Industrial Strength

logo DOVDover Corporation (DOV) is a diversified manufacturer of a broad range of specialized industrial products and manufacturing equipment. The company has evolved largely through acquisitions, with 79 acquisitions costing approximately $4.1 billion completed between January 2000 and December 2008. It has four operating segments: Industrial Products (33% revenue 2008), Engineered Systems (26%), Fluid Management (24%), and Electronic Technologies (17%).

DOV’s growth strategy is based on initiatives such as driving organic growth (new products, pricing initiatives, gaining market share, customer service), acquisition strategy (acquire and develop platform businesses, growth, innovation, higher-than-average profit margins), expanding globally, and improving operating efficiency.


DOV is a Dividend Aristocrat and member of Broad Dividend Achiever and has been raising dividends for last 55 years. The most recent dividend increase was in August 2009. My objective here is to analyze if DOV still continues to be a good dividend growth stock and how does it rate on my scale of risk-to-dividends.

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