matisse capital management

Companies Raising Dividends

The following companies recently announced increases in their dividend payments to shareholders, even as many businesses continue to cut payouts during this recession.   

   AAON, AAON Inc., from $0.16 to $0.18, semi-annually, yield = 1.7%

   ACE, Ace Limited, from $0.29 to $0.31, quarterly, yield = 2.8%

   AFSI, AmTrust Financial Services, from $0.05 to $0.06 quarterly, yield = 2.6%

   AIZ, Assurant Inc., from $0.14 to $0.15 quarterly, yield = 2.6%

   ARG, Airgas Inc., from $0.16 to $0.18, quarterly; yield = 1.7%

   CAH, Cardinal Health, from $0.14 to $0.175, quarterly; yield = 2.3%

   FDS, FactSet Research Systems, from $0.18 to $0.20, quarterly; yield = 1.5%

   FLO, Flowers Foods, from $0.15 to $0.175, quarterly, yield = 3.3%

   HNZ, HJ Heinz, from  $0.415 to $0.42, quarterly; yield = 4.6%

   JCS, Communications Systems, Inc., from $0.12 to $0.14, quarterly; yield = 5.7%

   KNX, Knight Transportation, Inc., from $0.04 to $0.05, quarterly; yield = 1.1%

   LOW, Lowe's Companies, from $0.085 to $0.09, quarterly; yield = 5.9%

   NC, Nacco Industries, from $0.515 to $0.5175, quarterly; yield =  5.9%

   NOC, Northrup Grumman, from $0.40 to $0.43 per share, quarterly; yield = 3.6%

   POR, Portland General Electric, from $0.0245 to $0.255, quarterly; yield = 5.7%

   PPDI, Pharma. Product Dev., from $0.125 to $0.15, quarterly; yield = 2.9%

   SVU, Supervalu, from $0.1725 to $0.175, quarterly; yield = 4.2%

   TAP, Molson Coors Brewing, from $0.20 to $0.24, quarterly; yield = 2.2%

   UHT, Universal Health Realty Inc., from $0.59 to $0.595, quarterly; yield = 6.9%

   XEL, Xcel Energy, from $0.2375 to $0.245, quarterly; yield = 5.7% 

Disclosure:  The author is long Flowers Foods (FLO).

Market News Around the World

Jobless claims are down slightlythis week to 631,000, from 643,000 the prior week, a change of -1.8%, but still a negative sign for the economy, moving the market south.  Many analysts point to the US auto industry as a source of many lay offs.  Nationally, the unemployment rate now stands at 8.9 percent, according to Barron's Econoday.  Things are tough on the other side of the Atlantic as well; S&P just lowered its outlook on Britain from stable to negative.  The full story is linked below with other news around the world:

S&P: Britain's outlook is "negative:" NYT

Northrop Grumman (NOC) raises its dividend: RTT News

IMF: Britain may have to nationalize more banks: Telegraph

Without Fiat deal, Chrysler may close all dealerships: Daily Finance

Perdigao (PDA) will take over Sadia (SDA): Bloomberg

Petrobras (PBR) gets $10 billion loan from China: Brazzil Magazine

Recession killing-off shopping malls: WSJ

Florida's BankUnited - this year's biggest failure: Forbes

3 companies with 'safe' dividends: Money Morning

Home prices drop 19.1% over last year: WSJ

Best Performers of the Top Small Cap Funds

Zack's recently named three top-performing small cap funds.  These were FRBR Focus (FBRVX), Conestoga Capital Advisor Small Cap (CCASX), and Queens Road Small Cap Value Fund (QRSVX).  I have added three other strong performers to this group, looking for small caps outperforming the market: T. Rowe Price Diversified Small Cap Growth (PRDSX), T. Rowe Price Small Cap Stock (OTCFX) and Goldman Sachs Small Cap Value Fund (GSSSX).  I analyzed the composition fo each fund, to find the best performing small cap stocks in these holdings year-to date, as a starting place, looking for possible investments.  The results were as follows:

    PALM, Palm Inc., +241.7%

    ADVS, Advent Software,+66.5%

    KMX, CarMax, Inc., +61.9%

    PENN, Penn National Gaming, +59.1%

    SBAC, SBA Communications Corporation, +54.4%

    NVEC, NVE Corp., +45.6%

    ILMN, Illumina, Inc, +43.4%

    WHG, Westwood Holdings Group Inc., +38.9%

    USU, USEC Inc., +37.9%

Dividend Slashers - 5/16

   AKR, Acadia Realty Trust - from $0.21 to $0.18 per share, quarterly

   MAKSY, Marks & Spencer Group, PLC - from £0.225 to £0.17, semi-annually

   MLHR, Herman Miller - from $0.088 to $0.022 per share, quarterly

   PC, Panasonic Corporation - from ¥22.5 to ¥7.5 per share, semi-annually

   STI, Sun Trust Bank - from $0.10 to $0.01 per share, quarterly

   TNK, Teekay Tankers, Limited - from $0.72 to $0.59 per share, quarterly

Dividend Slashers - 5/11

   BBT, BB&T Corp. - from $0.47 to $0.15 per share, quarterly

   BVF, Biovail Corporation - from $0.375 to $0.09 per share, quarterly

   CLF, Cliffs Natural Resources - from $0.0875 to $0.04 per share, quarterly

   CSFL, Centerstate Banks of Fla. - from $0.04 to $0.01 per share, quarterly

   REG, Regency Centers - from $0.725 to $0.46 per share, quarterly

   SLG, SL Green Realty Corp. - from $0.375 to $0.10 per share, quarterly

   SSS, Sovran Self Storage - from $0.64 to $0.48 per share, quarterly

   SXI, Standex International - from $0.21 to $0.05 per share, quarterly

   TM, Toyota Motor Corp. - from ¥140 to  ¥100 per share, annually

Market News Around the World

The annual change in auto sales by manufacturer between April '08 and April '09 are presented in the chart, left (click to enlarge).  Less expensive vehicles fared best over the past year.  BMW sales were down nearly 40%, Toyota 42% and Chrysler at the bottom with more than a 50% decline, contributed to, no doubt, by its pending bankruptcy.  Despite this grim data, Bernanke seems to fell that the economy is stabilizing and could turn upward later this year, per his remarks to the congressional Joint Economic Committee.  Other news from around the world follows:

Canadian insurers' profits could fall 1/3 (SLF, MFC): Globe and Mail

The financial markets are ahead of reality: Telegraph

Legg Mason (LM) reports loss, cuts dividend: FT

France wants to regulate hedge funds: FT

Petrobras (PBR) lifts its first oil from ultra-deep Tupi field: Brazzil Mag  

Japan's economy falls back into deflation: BBC

 China experiencing deflation: NYT

BT will cut its dividend: FT

Sun Life (SLF) will issue shares for dividend reinvestment: Reuters

EU fines Intel (INTC) €1.06 Billion: FT

Companies Raising Dividends

   IBM, International Business Machines - from $0.50 to $0.55 per share, +10.0%

   OXY, Occidental Petroleum - from $.32 to $0.33 per share, +3.1%

   SWY, Safeway Inc. - from $0.0828 to $0.10 per share, +20.8%

   VMI, Valmont Industries - from $0.13 to $0.15 per share, +15.4%

   XOM, Exxon Mobil - from $0.40 to $0.42 per share, +5.0%

Highlights from Exxon's 2008 Annual Report

Exxon (XOM) recently produced its 2008 report and proxy statement for its 2009 annual meeting.  As I am a shareholder, I took the time to delve through the report and accompanying documents.  While 2008 was in many ways a banner year for the company, accoring to the WSJ, in Q1 2009, "Exxon's spending exceeded its cash flow," and the company is taking steps to preserve cash.  Note: I bought XOM stock in 2008 because the P/E was under 8x and the company's current dividend yield was 2.5%, well above its 5-year average of 1.8%.   Below are some of the highlights from the recent report:

• 2008 earnings per share were $8.69 (a record), up 19.4% over 2007. Projections for 2009 are significantly lower at $4.20 per share.  Note: Q1 EPS was $0.92, below the consensus of $0.95.  The company has announced it will slow, but not discontinue, its share buyback program.
• Over the past five years, XOM has increased its annual dividend by 58%; dividends have increased for 26 consecutive years.
• XOM expects oil and natural gas to remain the primary energy sources, meeting close to 60% of global demand.
• Reserve replacements for 2008 were 103 percent of production.  Finding and acquisition costs average $0.66 per barrel of oil.
• Reserves = 72 billion oil equivalent barrels, of which a significant portion is in the oil sands of Canada.
• At year end 2008, the current ratio = 1.47, and LT debt to total assets = 3.1%.