Friday, May 11, 2012

Dividend Machine for week of May 7, 2012 Cullen & Frost Bankers (CFR)

Even veterans like me can be surprised to find a banking company that qualifies as a dividend machine.

            With the entire world in financial turmoil, I find it hard to believe that a company whose business is described as being “bankers” would qualify as a dividend machine.  

Every well conducted experiment; I include investing in that description discovers a few unexpected results.    I look for dividend machines; companies that pay us a minimal dividend of three percent and that increase that dividend every single year.   I was quite surprised to find a publicly traded banking company that meets that high hurdle.
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Cullen & Frost Bankers Inc. (CFR) has been a dividend machine for 18 years.  Ten years ago, had you bought CFR you would have received $.24 in May of 2002.   This year, 2012, if you own CFR by May 30, 2012 you will receive $.48 on June 15, 2012.  Income investors, that means your income doubled in ten years.    Have your apartment rents doubled in the last ten year?   Have your bond interest payments doubled in the last ten years?  I think not.  How about your social security?  I was not on social security at that time but my husband was and his social security income has increased only half the multiple of the CFR dividend.

The table below displays the company fundamentals that show CFR, Cullen & Frost Bankers continues to be a dividend machine.

DIVIDEND MACHINE
CFR


Price when profiled
$58.12
Last 4 Qtrs Earnings
$3.68
Last 4 Qtrs Dividends
$1.84
Current Qtr Dividend
$0.48
Annualized Div Yield
3.30%
No. Years Div Increase
18
Debt/Equity ratio
10.00%


           
            Sometimes even veterans like me are surprised at what they find when using a disciplined approach.   I am going to seriously consider adding this banker to my portfolio.   I have wanted to own something in this space but few companies meet the stringent criteria to qualify as a dividend machine.   Check out CFR

Very Truly Yours,

TheMoneyMadam