Let's See How Four Dividend Stocks Stack Up

As we get ready for the September quarter earnings season to begin in force, several companies announced fresh dividend increases, and one in particular is cutting its quarterly dividend by 29%. Which ones merit investor attention? That's what we're here to find out to let's get started. Let's see how these four names stack up and find which is the best bet. Looking Beneath the Surface: RPM International Coating company RPM announced a 5.6% increase in its quarterly dividend to $0.38 per share, which continues its streak of annual increases dating to 2003. Unlike Sherwin Williams , which has greater exposure to consumer repair and remodel spending, RPM's business focus is centered on the maintenance and repair applications. While folks that look for companies with an increasing dividend policy will want to dig further into RPM's business, those that look for enviable dividend yields will want to move along given the yield with the company's new annualized dividend is roughly 1.7%. RPM will pay its first $0.38 per share quarterly dividend on Oct. 30 to shareholders of record on Oct. 19. McDonald's Heats Up Fast food king and S&P 500 Dividend Aristocrat McDonald's served up a piping hot new dividend of $1.29 per share per quarter, a 3% increase from the prior one. Investors will note that despite the pressures placed on the restaurant industry as a result of Covid-19, McDonald's still delivered a dividend increase this year. Its ability to do that speaks to the company's ability to adapt and execute in a difficult environment, and in my view bodes well for its ability to increase dividends further when industry conditions normalize. The forward yield associated with MCD shares is roughly 2.3%, far better than that offered by RPM and we have the added comfort of knowing the company is a Dividend Aristocrat. McDonald's will pay this new quarterly dividend on Dec. 15 to shareholders as of Dec. 1. Sit Down for This: Basset Furniture's Returns Dividend In July this furniture company declared a dividend of $0.08 per share and also announced a deferred dividend payment of $0.125 per share from earlier in the year, both of which were paid at the end of August. Recently, Bassett restored its $0.125 per share per quarter dividend, which will be paid on Nov. 27 to shareholders of record at the close of business on Nov. 13. The issue I have with this is the way it's presented and the press release headline exemplifies what I'm talking about: Bassett Increases Regular Quarterly Dividend. While technically true, the headline is misleading, I would contend, as the company really just returned to the $0.125 per share per quarter after a temporary pause and dividend cut. I'd rather have seen Bassett say it was returning its quarterly dividend to its prior level, but that may not have attracted as much attention. In terms of the yield, on an annualized this renewed $0.125 per share quarterly dividend offers dividend hunters a yield of 3.2% -- so far the best of the bunch, but I still have a sour taste in my mouth over how it was presented. GEO Group a Go? And now for that dividend cut: It was real estate investment trust Geo Group that focuses on correctional facilities that slashed its quarterly dividend by 29% to $0.34 per share. Given the company's status as a real estate investment trust, we know it must pay out at least 90% of its taxable income to shareholders and 2020 with the consensus calling for its EPS to drop to $1.10 from $1.40, that dividend cut isn't all that surprising. The thing is even after that slashing, the dividend yield associated with GEO shares clocks is around 12%. While the company had roughly $136 million in cash and restricted cash on hand exiting the June quarter, the expected dividend payment stream to be had over the coming year requires at least $161 million in capital. While the company has been generating cash flow from operations, shareholders that are enticed by the dividend yield may want to see if the Geo's business has rebounded from the pandemic related havoc that hit it in the June quarter. I'm referring to the decline in occupancy levels and correctional population that led the company to not rebid certain contracts, impacting its capacity usage. And the winner is... The optimal choice among the above is McDonald's, given its ability to not only maintain its dividend during the pandemic, but increase during one of the most challenging periods in the company's history. To me that speaks volumes.

Let's See How Four Dividend Stocks Stack Up

Here we'll look at dividend news for RPM International, McDonald's, Basset Furniture, and GEO group.

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