About: Avery Dennison (NYSE: AVY), Avery Dennison, Avery Dennison, Avery Dennison quarterly dividend

Avery Dennison (NYSE: AVY), the California-based maker of labels, office products and related fare, said it will be in a position to boost its dividend in the second half of this year and a share buyback plan may accompany the higher dividend.

That’s welcome news for shareholders that endured Avery Dennison’s 50% dividend cut last year.

The company slashed its payout to conserve cash and reduce its debt load. Avery Dennison is on pace to lower its debt burden by $350 million this year.

Most of Avery Dennison’s free cash flow is generated in the second half of the year, making it easier for the company to digest a dividend increase in the summer or fall than earlier in the year.

The dividend hike would likely take Avery Dennison’s quarterly dividend to 25 cents a share from 20 cents, according to Bloomberg data. Avery Dennison shares currently yield 2.3%.

With more than more than 25% of the S&P 500 raising dividends this year, investors have their pick of sectors from which to shop for newly increased payouts. While big financials have continued to sit on the sidelines when it comes to increased dividends, some sectors have shined, including consumer staples and energy. Another stalwart among the dividend boosters has been the retail sector. Both high-end retailers and their less pricey brethren have been among the more prolific dividend boosters in 2010.

About: Wal-Mart (NYSE: WMT), Family Dollar (NYSE: FDO), Costco (Nasdaq: COST), (NYSE: WSM), Lowe’s (NYSE: LOW), Home Depot (NYSE: HD), Williams Sonoma (NYSE: WSM), Gap (NYSE: GPS), TJX Cos. (NYSE: TJX), Nordstrom (NYSE: JWN), Coach (NYSE: COH), Tiffany (NYSE: TIF)

Wal-Mart (NYSE: WMT), the world’s largest retailer, announced an 11% dividend increase in March. Wal-Mart has steadily been increasing its payout every year since 1974. Another discount retailer, Family Dollar (NYSE: FDO), boosted its dividend in January, marking the 33^rd consecutive year Family Dollar has ratcheted its payout higher. Of course we cannot forget about Costco (Nasdaq: COST), the largest operator of warehouse stores in the U.S., announcing a 14% increase to its quarterly dividend.

Towards the higher end of the retail spectrum, Williams Sonoma (NYSE: WSM) has announced not one, but two dividend increases this year. The company also announced a $60 million share buyback in late May. Lowe’s (NYSE: LOW), the second-largest home improvement retailer, announced a 22% increase to its quarterly dividend late May. Lowe’s rival and Dow component Home Depot (NYSE: HD) announce a dividend increase in February.

Apparel retailers have joined in the party as well with Gap (NYSE: GPS) announcing an 18% to its annual dividend in February accompanied by plans for a $1 billion share repurchase program. TJX Cos. (NYSE: TJX), the operator of the Marshalls and TJ Maxx discount retail stores, said in April it will boost its quarterly dividend by 25% to 15 cents a share, marking the 14^th straight year the company has raised its dividend.

Retailers of glamorous and glitzy items have also proven to be fertile ground for dividend hunters. Seattle-based Nordstrom (NYSE: JWN) said in May it would unveil its first dividend increase since 2007, raising its quarterly payout 25% to 20 cents a share. Coach (NYSE: COH) doubled its dividend in April after announcing its first-ever payout in April 2009.

Of the high-end group, Tiffany (NYSE: TIF) is the name that really shines. The purveyor of the famous blue boxes and expensive diamonds announced an 18% increase to its quarterly dividend in January along with saying it would reinstate a share repurchase plan with $402 million left on it. Tiffany followed that up by announcing a 25% increase to its quarterly dividend in May.

Overall, 2010 has been a solid year for dividend increases among retailers and we would expect that trend to continue if the economic recovery continues in earnest and the employment picture brightens.

About: Safeway (NYSE: SWY), Dominick’s, Safeway, Vons, Ashland (NYSE: ASH), Ashland Chemical, Hercules Chemical, Dow Jones  U.S. Select Dividend Index, Zenith National Insurance (NYSE: ZNT), H.J. Heinz (NYSE: HNZ), Fairfax Financial (NSYE: FFH), GoldCorp (NYSE: GG), GoldCorp

Supermarket operator Safeway (NYSE: SWY) announced a payout increase dividend shoppers may want to take a look at. The California-based company said it will boost its quarterly dividend by 20% to 12 cents a share. Safeway operates stores under the Dominick’s, Safeway and Vons names. The new dividend is payable on July 15^th to shareholders of record on June 24^th.

 

Specialty chemicals maker Ashland (NYSE: ASH) doubled its quarterly dividend to 15 cents a share from 7.5 cents. Ashland has been diligent about bolstering its balance sheet through asset sales following the company’s acquisition of rival Hercules and the lower debt burden appears to be directly benefiting shareholders.

 

The Dow Jones  U.S. Select Dividend Index will replace Zenith National Insurance (NYSE: ZNT) with H.J. Heinz (NYSE: HNZ) because Zenith is being acquired by Fairfax Financial (NSYE: FFH). The change will take place on May 21^st. The index tracks the 100 highest dividend-paying companies in the U.S.

 

Canadian gold miner GoldCorp (NYSE: GG) said it will consider boosting its dividend in 2011 as production increases and rising gold prices are helping the company bolster its cash position. GoldCorp currently pays an annual dividend of 18 cents  a share.

Dow component General Electric (NYSE: GE) may have up to $25 billion in cash in its war chest by the end of this year, putting the company in a position to repurchase shares by the end of the year and perhaps raise its dividend in 2011. GE CEO Jeffrey Immelt said on Wednesday that he expects his company to show strong earnings growth over the next couple of years.

About: General Electric (NYSE: GE), General Electric, GE CEO Jeffrey Immelt, Dow, Dow Chemical 

Immelt added that an announcement on a dividend increase could come by the end of 2010. A dividend increase from GE could take the quarterly payout to 12 cents a share from 10 cents, according to Bloomberg estimates.  GE cut its quarterly dividend to 10 cents a share from 31 cents in February of 2009 in an effort to conserve cash in the wake of the financial crisis. It was GE’s first dividend cut since 1938. The company was formerly the biggest dividend payer in dollar terms.

GE halted share repurchases in September 2008, but Immelt said the company would be “opportunistic” about share buybacks. Immelt also said the company is looking to resume its acquisitive ways and is evaluating purchases in the $1 billion to $3 billion range.

After only two quarters of paying a dividend, Dr. Pepper Snapple Group (NSYE: DPS), is already raising its payout and in a big way. The company said it will raise its quarterly dividend by 67% to 25 cents a share from 15 cents. The new dividend is payable on July 9^th to shareholders of record on June 21^st. Dr. Pepper Snapple declared its first dividend in November 2009.

About: Dr. Pepper Snapple Group (NSYE: DPS),Dr. Pepper Snapple, Coca-Cola (NYSE: KO), PepsiCo (NYSE: PEP)

The new dividend would give the stock a yield of 2.62% based on Wednesday’s closing price. That yield would still have Dr. Pepper Snapper trailing rivals Coca-Cola (NYSE: KO) and PepsiCo (NYSE: PEP), but both of those companies also raised their payouts earlier and the Dr. Pepper increase trumps both, at least on a percentage basis.

When the company reported earnings earlier this month, it said that it has $755 million available to return to shareholders this year. Analysts said Dr. Pepper Snapple is positioned to take market share in the U.S. from rivals this year.

Consumer staples giant Clorox (NYSE: CLX), the maker of its namesake bleach, Kingsford charcoal, Hidden Valley salad dressings and Pine Sol cleaning products, raised its quarterly dividend by 10% to 55 cents a share from 50 cents. The new dividend is payable on August 13^th to shareholders of record on July 28^th.

Earlier this month, California-based Clorox reported fiscal third-quarter results that disappointed investors and said that its sales and gross margin for the full year will come in at the low end of estimates. The company did boost the low end of its profit guidance. Clorox also said it is mulling the sale of its Armor All and STP brands.

            The new dividend would give Clorox a yield of about 3.4% based on Wednesday’s closing price of $63.91 and it should be noted that Clorox is a true dividend dynamo as this is the 33^rd  consecutive year that the company has increased its dividend. In a market environment where playing some defense with a steady dividend payer like Clorox is a good idea, the stock may be worth a look as it is trading for less than 14 times forward earnings, below where rivals Colgate-Palmolive (NYSE: CL) and Procter & Gamble (NYSE: PG) currently trade.

High-end retailer Nordstrom (NYSE: JWN) is known for its fancy stores that feature scores of pricey apparel, fragrances and footwear more than it is for being a stock that income investors flock to. Nordstrom may be trying to change that with the announcement that will boost its quarterly dividend by 25% to 20 cents a share from 16 cents. The new dividend is payable on June 15^th to shareholders of record on May 28^th.

            Last week, Seattle-based Nordstrom said its first-quarter profit jumped 43%, but its full-year outlook disappointed investors. When factoring in the new payout, Nordstrom shares would yield about 2.1%, a fair amount above the 1.6% the shares currently yield. Analysts expect Nordstrom to earn $2.62 a share this year and $3.05 a share next year, so dividend coverage appears sufficient.

            This is Nordstrom’s first dividend hike 2007, but the payout has almost doubled since 2006.

Materials and mining stocks are not for the faint of heart and making a long-term investment in one of these names all the more difficult is the fact that these sectors usually aren’t home to good dividends or strong yields. Stocks like Cliffs Natural Resources (NYSE: CLF), a maker of iron ore pellets used by steelmakers, are momentum stocks and when the momentum is bad these stocks can really take it on the chin.

About: Cliffs Natural Resources, Cliffs Natural Resources (NYSE: CLF), quarterly dividend, dividend, dividend increase,

Between China’s efforts to cool economic growth, Australia’s proposed 40% tax hike on mining firms doing business there and the European sovereign debt crisis, high-beta materials names have been throttled in the past month. Cliffs is no exception as the shares have plunged almost 25%, or about $20 in dollar terms, compared to a 4% for the S&P 500.

Minnesota-based Cliffs finally delivered some good news for beleaguered shareholders on Tuesday when it announced a 60% increase to its quarterly dividend. That takes the dividend to 14 cents a share from 8.75 cents. The new dividend is payable on June 1st to shareholders of record on May 14th. Even with that substantial increase, Cliffs shares would still yield less than 1% and that’s hardly anything to get excited about.

This is the second consecutive year that Cliffs has raised its dividend and it should be noted the company has more than tripled its payout in only a year.

About: Occidental Petroleum (NYSE: OXY), Occidental Petroleum, California-based Occidental, Occidental, Occidental’s dividend, Citigroup’s Phibro energy trading business

We read with interest a recent report in Barron’s about the energy sector in 2010 that said investors may be well-suited to stick with oil companies rather than natural gas stocks in the new year. The cornerstone of the report was a bullish outlook for independent oil and gas explorer Occidental Petroleum (NYSE: OXY).

While California-based Occidental only yields 1.6%, the annual dividend is decent in dollar terms at $1.32 a share. In addition, the capital appreciation delivered by Occidental in 2009 is nothing to scoff at as the shares are up 40%.

Even with that big run, the Barron’s report quotes a couple of analysts and fund managers that think most investors have woken up to the Occidental story and that when they do, the stock is poised for even more upside. We don’t doubt that assessment for a minute.

As the Barron’s piece noted, Occidental trades for just 14 times forward earnings compared to 17 times for its peer group. Occidental’s balance sheet is also something to behold with an 8% long-term-debt-to-capital ratio, compared to 33% for rivals, the piece noted.

Those statistics are reasons to like Occidental, but one tidbit in the Barron’s article that we found particularly noteworthy was an unidentified fund manager saying that Occidental’s dividend could grow by 15%-20% in 2010.

Assuming a 20% dividend hike, that would take Occidental’s dividend to just over $1.58 a share. Occidental has paid quarterly continuously dividends since 1975, a track record that we view as encouraging for investors.

Occidental does the bulk of its exploration in the U.S., but it does have some exposure to South America and the company was the only U.S. firm to win a bid as a junior partner in the recent round of Iraq oil field auctions.

Combine those factors with the company’s shrewd acquisition of Citigroup’s Phibro energy trading business and Occidental may in fact generate more than enough cash for a 2010 dividend hike.

About: Union Pacific (NYSE: UNP), Union Pacific, largest U.S. railroad operator, Nebraska-based Union Pacific, quarterly dividend, dividend increase

Union Pacific (NYSE: UNP), the largest U.S. railroad operator, said it will increase its quarterly by 22% to 33 cents a share and raise its 2010 capital spending plan by $100 million to $2.6 billion due to increased shipping volumes.

The new dividend is payable on July 1st to shareholders of record on May 28th.

Nebraska-based Union Pacific lasted raised its dividend in 2008, but with news of the latest dividend increase, the company’s payout has more than tripled since 2002.

A dividend hike and increased capital spending plans are positive signs from a company that is as economically sensitive as Union Pacific is.

Transportation firms provide investors with good insight regarding the overall health of the economy and the fact that UP is seeing more robust shipping volumes is good news.

The company also said it may bring back some of the 2,800 workers it furloughed last year. On top of the dividend increase, Union Pacific is rewarding shareholders another way with plans to extend a share repurchase plan that expires in March 2011.

The company did not specify the amount of that buyback, but the current plan allows for the repurchase of 32.6 million shares.