shares topped $700 on the heels of a major two-month run.
was part of the excitement surrounding Apple, but that wasn't
released until mid-September. What started the run was the
company's first-ever dividend offering.
After months of shareholder handwringing that it was being too
stingy with its massive cash stockpile, Apple finally caved to
investor demand and initiated a dividend. The company made the
announcement on July 23, 2012. The stock jumped 10% in less than
Apple was a high-profile example of the power of dividends.
Initiating a dividend added 10% to Apple's share price in less
than a month. Several smaller-profile companies have gotten
similar bumps after initiating dividends in recent months.
Here are three recent examples:
The North Carolina-based clothing company announced its
first-ever dividend on April 3. Since then, the stock has risen
28%, hitting an all-time high in late July.
Shares of this small-cap computer accessories company had been
on a steady decline for two and a half years as demand for
personal computers has waned. Entering May, the stock was trading
at its lowest level since 2001. On May 22, however, Logitech
announced an annual dividend of 84 cents a share, to be paid in
the second week of September. Since then the stock has risen 14%
at a time when the S&P 500 has been flat.
Alaska Air Group (
On the heels of a successful stock repurchase program last
September, the parent company of Alaska Airlines tried to further
boost its share price by initiating a dividend. The quarterly
dividend, which pays 20 cents per share, was announced on July
11. Since then, ALK stock has risen 6%.
Three recent dividend initiators, three success stories.
Introducing a dividend gave the three stocks an average boost of
16% within a matter of months.
There are fewer and fewer large companies that don't pay
these days. According to research by the investment group
BlackRock, 81% of S&P 500 companies now offer a dividend. The
blue-chip company that doesn't offer a dividend is becoming a
That means we can expect more
to come online in the coming months. It's impossible to predict
what company will be the next to initiate a dividend, but
), eBay (EBAY)
are three high-profile stocks that come to mind. Paying a
dividend has become the norm for so many companies that it's now
essentially bad publicity not to offer one. Just look at the
outrage directed at Apple prior to its dividend
More importantly, the benefits of offering a dividend are
obvious. There's always been a theory that dividend stocks don't
return as much as non-payers. However, from 1927-2011 dividend
stocks returned an annualized average of 11.2%, while
non-dividend payers returned only 8.3%.
That's almost a century's worth of proof that dividend stocks
can also net healthy gains. Now we have a number of recent
examples of how initiating a dividend helped boost companies'
So if you find yourself holding onto a number of stocks that
don't pay a dividend, don't panic. If you're patient, odds are
they may offer one soon. And that could make for a nice