Catlin's interim dividend up over 5%

Catlin recently announced it's interim dividend. It is up just over 5% at 10p per share (from 9.5p per share).The interim dividend will be paid on the 20th September with the ex dividend date being the 23rd August.

Another strong stock with a great dividend growth policy. I continue to hold this for the long term.

British American Tobacco's dividend is like clockwork

British American Tobacco (BATS) revealed their interim results today. As expected they again increased their interim dividend. They just never seem to let us down. Fair play it was only an increase of 7% from 42.2p per share in 2012 to 45p per share in 2013. This underlines British American Tobacco's dividend policy though and dividend growth is the norm and has been for some time. They will go ex dividend on Wednesday 21st August with the interim dividend being paid on Monday 30th September.

Earnings per share were up 9% to 106.6p per share which gives a healthy and robust dividend cover of 2.4 the dividend growth policy is in no fear of easing off the gas. I continue to hold these for the long term.

Hiscox interim pre-tax profit up 43.6%

I posted yesterday following Hiscox interim results when they reaffirmed their dividend growth policy and increased their dividend by a whopping 16.7%. I failed to note though that the dividend growth was possible due to an increase in interim pre-tax profit that dwarfs the dividend increase. In 2012 the interim pre-tax profits were £125.8m which increased to £180.7m in 2013. This clearly justifies such a dividend growth.

Hiscox explosive dividend policy hikes the interim dividend

Well Hiscox showed their clear intentions with regard to their dividend policy today on releasing their interim results. Their interim results today showed an increase in Gross premiums written from £906.4m in 2012 to £1017.9m in 2013 (an increase of 12.3%). As a result the interim dividend has soared from 6p per share to 7p per share giving an increase in the interim dividend of 16.7%. The board clearly want to show that they are keen to increase the dividend yield for the shareholders, fingers crossed this positive dividend growth policy will hold firm on the release of the full year results and we will see a hike in the final dividend. The interim ex dividend date is yet to be announced.

Carillion continues to win

Carillion continues to win work in a rocky environment. At the start of the month Carillion were selected as the preferred bidder for a £335million private partnership project with the Royal Hospital public private partnership project. See news here.

They have also won a £400 million deal in the first phase development of the Battersea Power Station development also.

Carillion is trading at close to 4 year lows at a price of around 252p per share and although they are ex dividend they currently have a yield of around 6.5% with what I view to be a strong dividend policy going forward. I currently hold and have that view for the long term.

Better value is a better yield

When looking at investing in a share with a strong dividend policy and hefty dividend growth it is glaringly obvious that the cheaper you get the share for the better the yield will be. The dividend will obviously be the dividend but the yield will be better.

Some advisors suggest drip feeding cash on a monthly basis to avoid swings in the share price and give more of an average. This is obviously far less risky but can be far less fruitful. I am more keen to wait until there is a retrace in the share price and, so long as this isn't due to severe bad news or a reduction in the dividend, take a position that I'm happy with. This way I can take advantage of better yields.

This can be liable to downsides. In recent years I've watched a number of shares waiting for said retrace only to watch the share price fly, Interserve and Cineworld are two examples. That said its always better to miss a winning opportunity then to suffer a loss. Or at least that's what I keep telling myself.

African Barrick Gold (ABG) slides away

I'm holding this sliding stock currently. African Barrick Gold unfortunately don't benefit from cheap mining costs and as such are now looking at mothballing (albeit temporarily) mines due to the current slump in gold prices. The final dividend is due this week which amounts to 12.3 cents per share, at these rates though (as always) my dividend will be reinvested (I'll get a hat full of shares at these prices). I do feel though that African Barrick Gold will be left floundering until the price of gold picks up. If this doesn't happen within a reasonable length of time however then this will suffer and the final results will be poor. This will no doubt affect the share price and inevitably the dividend policy will change and the dividend will be slashed.

I'll continue to hold as I feel this could come back to a reasonable level, a bid could change everything in the blink of an eye.

Vodafone's final results unveil their medium term dividend policy

So Vodafone’s final results were out this morning and contrary to what I believed they have again increased their dividend. They did see overall revenue down by 4.2% which just highlights the difficulties they are experiencing in finding growth in their markets.

They have announced though that they are to give a final dividend of 6.92 pence per share making a full year dividend of 10.19 pence which is up 7.0% on the year, very healthy. This underpins their dividend policy to date.

Going forward however things are expected to soften, Vodafone’s dividend has increased by 22% in the last three years. The board has announced though that at the current levels they will focus on maintaining the dividend at current levels. This is not a dividend policy a dividend growth investor wants to read. Maintaining the dividend at these levels indefinitely is a shame and is a bit of a deterrent from my point of view.

No mention of a sale of Verizon either which may disappoint Vodafone investors as they were hoping for a possible windfall from that sale. Vodafone will receive a dividend of £2.1 billion from Verizon however, this will be held in the business and won’t be distributed.

Following the news of the dividend policy I will remain on the sidelines.

Vodafone releases its results tomorrow

I posted recently about Vodafone and the possibility their dividend could take a hit. Well tomorrow is the day the results are released and their dividend policy will be revealed. They have increased their dividend for the last 6 years but rumour has it that they are about to have a change in dividend policy.

First Group results are a dividend disaster

First Group released its preliminary results this morning and they were pretty abysmal with a reduction in pretax profits of 87%.

When you look at the dividend history for First Group it can be seen that they have furnished investors with dividend increases every year for the last six years. This shows the positive dividend policy they've had over the last six years.

However with ballooning debt not only have they cut the dividend but they have cancelled it. I posted recently about the danger of a company reducing the dividend. Well this is the worst case scenario for a dividend investor. I did have shares in First Group up until fairly recently but due to the increasing debt and the insecurity of the profit I suspected that the dividend wasn't safe and sold my position at a loss. Looks like I made the right call, thankfully. First Group are still showing a reasonable dividend cover, this just goes to show though how quickly things can deteriorate.

First Group have announced also this morning that they are to dilute the shares with a rights issue. So whilst they have had a great dividend policy reflected by their dividend history it has all come to a shuddering halt. An example that it's important to keep monitoring the situation with holdings.

Carillion and Morrisons went ex dividend

Carillion and Morrisons both went ex dividend on Wednesday.

Whilst you expect the share price to fall by the amount of the dividend, Carillion's share price has fallen way further than that. It is now offering a yield of around 6.8% with a current dividend cover of more than 2. As I already have a fair exposure I won't be buying any more but I think at these levels it's cheap and should only go in one direction. That said, as we've seen nothing is certain and it could fall further.

Melrose directors show faith

Melrose directors have put their money where there mouths recently, which is great for confidence. Miles Templeman bought 60,000 shares last week to a total value of £152,400. More notable however is James Miller who bought 365,000 shares at the end of March with a total value of close to £1,000,000. This trade certainly instills confidence in the shareholders if they're taking positions to that extent. Comforting to say the least.

It's not what it seems at Melrose - no, it's much better!

I bought into Melrose in mid November (at a price of 206p per share) following a tumble in the share price on the release of their interim management statement. I didn't actually think that the statement was that bad and it appeared that the market had over reacted as it has a tendency to.

I'd already done the research into Melrose and they appeared to have a great dividend history, increasing dividends year on year demonstrating that they have a great dividend policy. To the naked eye though this isn't how it appears. Up until this year Melrose have shown dividend growth year on year and the dividend policy has been rock solid. This year however there has been a reduction in the dividend.

This is down to a rights issue whereby more shares were issued. The actual dividend was the same as people received more shares during the rights issue just that the dividend was reduced per share.

So without the adjustment for the rights issue the dividend history and dividend growth would appear as below;

            Dividend    Dividend Growth
2006         6                  
2007       6.75              12.50%
2008         7                  3.70%
2009        7.7               10.00%
2010        11                 42.86%
2011        13                 18.18%
2012        7.6               -41.54%

This throws out a 6 year average dividend growth of 7.62% which in itself is pretty good but a reduction of 41.54% in the last year would be sufficient to stop any dividend growth investor dead in his tracks.

If you take a look at the rights issue adjusted dividend history however it shows a different story.

            Dividend    Dividend Growth
2006        3.4                  
2007        3.8              11.76%
2008         4                 5.26%
2009        4.4              10.00%
2010        6.3               43.18%
2011        7.4               17.46%
2012        7.6                2.70%

Here the 6 year average dividend growth rises to 15.06% when you amend the dividends for the rights issue. Melrose also sporadically issue a return of capital to shareholders following the sale of companies, which took place in 2007 and 2011. These are a massive bonus but as these are incidental I've not included them in the dividend growth calculations above.

As such it can be seen that the dividend policy at Melrose is superb and they have a strong ethos of dividend growth. When I took a position the yield was around 4% however following the increase in price the yield has reduced to around 3%. Not a great yield for a dividend share so at these prices I probably wouldn't take a position but I currently have the view of holding for the long term.

Actual and adjusted dividend history can be seen here.

The shrinking average of Tesco dividend growth

Tesco company dividend policy has been a bit pasty in recent years just 2 years ago their dividend history shows that they have benefited from a 6 year average dividend growth of 11.4%. Having seen dividend growth of only 2.1% last year and a dividend policy to freeze the dividend this year due to profits being hit as a result of the ailing Fresh and Easy in the U.S.A. the average dividend growth has shrunk to 7.5%.

Whilst it is a shame to see any reduction in the average dividend, the dividend policy hasn't swung far enough for us to see a reduction in the dividend and I'm hoping now that the Fresh and Easy debacle has been put to bed we will again see the profits and dividend growth of a couple of years ago.

The year Tesco dividend policy waivers

This year Tesco has announced a freeze in its dividend. The below is the 7 year dividend history and the 6 year average dividend growth.

              Dividend      Dividend Growth

2007         9.64                
2008        10.90                13.07%
2009        11.96                 9.72%
2010        13.05                 9.11%
2011        14.46                10.80%
2012        14.76                 2.07%
2013        14.76                 0.00%


Tesco have a solid 6 year average dividend growth of 9.42% which makes it pretty attractive. Up until this year Tesco have had a strong dividend policy and from the dividend history it can be seen that year on year Tesco have offered substantial dividend growth. This year however with one thing and another, primarily the failure that was Fresh and Easy and the downturn in the economy, Tesco has been forced to freeze the dividend. So they've not reduced the dividend to ensure that investors don't see their dividend policy falter too much. Hopefully this year there'll be further increases. I took a position following poor results in January 2012 at a price of £3.27, I'll continue to hold.

Vodafone's dividend policy could sag

It's rumoured that the top chap at Vodafone is not going to renew his pledge to increase dividend payouts due to uncertainties with the Eurozone. Vodafone have had a great dividend policy and the dividend history shows that Vodafone have rewarded investors with year on year increases in dividend payments since 2000. The results are due out this week. I looked at Vodafone recently specifically due to their meaty dividend and dividend policy but I felt I missed the boat when the price jumped on the back of news about Verizon. I'm staying on the sidelines with interest about where the dividend goes with the results.

Why professionals don't like dividends?

In my investing quest I've done varying amounts of research into different investing criteria. The vast majority of stock brokers and advisers seem to push the next big growth stock. Being a sceptic this is naturally because they want you to experience fluctuations in the market. With fluctuations you trade whether you are in profit or cutting losses. With trading you incur costs - to the brokers benefit, they love you incurring costs, the more trades you make the more profit they make.

With a buy and hold outlook which is the view I take when looking at company dividend policy and dividend growth stocks I incur one trading fee when I buy the stock and a 1% (although different brokers have different fee structures) dividend reinvestment fee. So whilst, for the main part, I don't follow the method the brokers and advisers would prefer, it is a far cheaper investing method when it comes to trading fees and charges. It can't be too far wrong either as Warren Buffet agrees with me, his favourite investing period isn't short term or medium term, it's forever.

Pan African Resources on the up

There's been a lot of action with Pan African Resources lately which I have held for some time and managed to buy in at at around 6.5p. This was one of my earlier investments when I was chasing the "next ten bagger". I think this was one of only a handful that I've had any success with over the years. It was paying a dividend too until recently but it was suspended in order to acquire Evander, another goldie.

The CEO, Jan Nelson, departed Pan African Resourecs recently under discreet circumstances in that nobody really knew why he left other than for personal reasons. Concerns were that he had been poached however he, up until now, hasn't appeared within another company.

There was also a rights issue to fund the Evander acquisition which you would expect have an impact on the share price, fortunately in this case it didn't. What did have an impact on the share price was the stuffing that gold got when Cyprus announced it was to flog it's gold to pay off it's debt. I think this is a solid play though and generally (this year excepted) has a great dividend policy. I think the future for Pan African Resources is looking good, pending the gold price where we should hopefully see the reinstatement of the dividend.

Following the hit Pan African is seeing a recovery today, currently up 6.25% on constant gold prices.

Director offloads shares at British American Tobacco

John Daly, the COO of British American Tobacco sold around a third of his shares this week. The first quarter has been hit by overseas sales due to exchange rate movements.

Does he feel that there is a headwind for British American Tobacco or does he need to free up some cash for personal reasons? A lot is often read into directors share sales however it could be for anything in my view and whilst past history is no guarantee for the future, I feel British American Tobacco's dividend policy  is solid in recent years so I am staying put.

Sainsbury's take on Tesco Finance?

Sainsbury's results are out tomorrow and it is expected that they are to announce their intentions to buy out their partner in the Sainsbury Bank venture, Lloyds, who currently own 50% of the outfit.

Tesco did the very same thing when they bought the other 50% of Tesco Finance from Royal Bank of Scotland 5 years ago. 

Sainsbury's made £25m pretax profit from their share of the banking arm last year so could have an interesting future. An increase in pretax profit of around 5% is expected to be announced tomorrow which will hopefully lead to an increase in the dividend. Sainsbury's have a strong dividend policy and have seen dividend growth every year for the last 6 years.

I currently don't hold Sainsbury's but this may well change shortly pending the results.

Imperial Tobacco is the dividend of the week

According to Dividend Investor, Imperial Tobacco is the dividend of the week.

They have reiterated the solid interim dividend increase of around 11%, going ex dividend on the 17th July. They also suggested Sainsbury's and SSE as contenders for the dividend of the week, I'll look into these and their respective dividend policy shortly. Nice to read though so soon after taking a position.

African Barrick Gold - a dividend paying gold stock?

Concisely, yes African Barrick Gold is a dividend paying gold stock. But is it one worth investing in? 

This kind of stock doesn't normally suit my requirements, normally I invest in large caps with a strong dividend policy and positive dividend growth but it caught my eye a while ago when I was looking for exposure into gold. Gold stocks themselves have greater leverage to the price of gold compared with gold itself. When the price of gold goes up, hopefully the price of gold stocks goes up by more but, as has been seen when the price of gold pulls back, gold equities have the potential to collapse.

I dipped into African Barrick Gold a while ago on a dip in price and managed to make 40%. The price again retraced and I took another position. The price continued to slide. 

Part of this was due to the deal with the Chinese Government falling through alongside the issues in Cyprus which caused gold to take a pounding when they announced that they were to sell part of their gold reserves. African Barrick Gold were also having problems with extraction and were failing to achieve targets. They also have a high cost of extraction compared to their peers which means any reductionism the price of gold hurts their margin.

They are currently (well on last years dividend) paying a dividend of 16.2 cents per share which equates to around 10.5p per share. On today's price that gives a hefty yield of around 7%. Their dividend policy to date (they have only existed for 3 years) is reasonable and we've seen no reduction yet however their dividend cover is now less than 1 (their dividend is greater than their earnings). This is never good and creates all kinds of uncertainty for the future.

So whilst this pays an attractive dividend currently nothing is certain with the future and I think this will get slashed unless there is a big turnaround with the price of gold, the output volume and their production costs. As a growth stock at these levels it might be worth a punt for those with an appetite for risk but as a dividend stock it's to avoid (I continue to hold), I just don't feel the dividend policy will held be if the share price and other factors don't see a serious turn around.

Imperial Tobacco Half Year results and confirmation of the dividend policy

So the Imperial Tobacco half year results are out and Imperial Tobacco have indeed confirmed their intentions with their dividend policy. They are to increase the interim dividend by 11% (31.7p to 35.2p).

The board have also confirmed that they intend to increase the dividend by at least 10% per year, music to any income investors ears. Of course this is liable to change pending performance but is great to hear. They have confirmed that they intend to employ this dividend policy for the medium term. The shares go ex dividend on the 17th July 2013 with a pay date of 16th August.

On this information I have taken a position at 2300p per share.

Greggs isn't flavour of the month

Greggs shares were hit today following a poor interim management statement. They have stated that the like for like sales in the first 17 weeks was down 4.4%. They have put this down to the adverse weather conditions on the high street, which most of the retail industry are blaming their fall in sales on. What is interesting however is that they have stated they expect no improvement in the difficult trading conditions, which is odd as I thought we could expect better weather now heading into summer.

They issued their preliminary results on the 20th March and announced a final dividend of 13.5p per share (to go ex dividend on 26th April and paid on the 24th May). This will give a total dividend of 19.5p per share, a measly annual dividend increase of 1%. The dividend cover therefore sits at 2 currently based on these figures, so it does remain well covered.

The Chairman advised in his statement that the board remains committed to pursuing a progressive dividend policy. This will naturally hinge on profitability. I will calculate the average dividend growth over recent years shortly. I have been watching these for some time, now relieved I didn't commit.

Imperial Tobacco profits reassured

Following on from my previous post regarding the uncertainty of Imperial Tobacco's dividend policy due to the reduction of profit in their last financial year it appears there is a logical and perfectly good explanation or this.

They felt during the last financial year that the goodwill in Spain was overstated and as a result wrote it down by £1.3bn as a result this reduced their assets and the profit. So whilst the dividend cover has been hit severely it could be deemed for being a manipulation of the figures - albeit negative.

It will be interesting to see what the half year results give shortly with regard to the profit and whether they stick with the progressive dividend policy and dividend growth.

Imperial Tobacco - a consideration?

I recently read an article suggesting that Imperial Tobacco is a favourite in the dividend growth stocks field with an excellent company dividend policy seeing double digit dividend growth. So is it worth a shot?

Firstly lets have a look at the strength of the dividend policy by figuring out the seven year average dividend growth.


             Dividend    Dividend Growth
2006        62p              
2007       69.5p             12.1%
2008       66.2p             -4.75%
2009        73p              10.27%
2010       84.3p            15.48%
2011       95.1p            12.81%
2012      105.6p           11.04%

So the average dividend growth over the 6 years is a whopping 9.49%,  clearly a lot of importance is put on their dividend policy. Now the dividend cover, a dividend of 105.6p and earnings per share of 68.1p Which gives a dividend cover of 0.64. Seemingly quite substandard.

It is also important to note that back in 2008 there was a dip in the dividend which means the dividend policy isnt as robust as I would hope for, I think it may therefore be worthwhile to wait for their next results to see what they intend with regard the dividend policy.


This will clearly need further research as they paid dividends out of reserves last year which is never good. Research may show that there may have been special circumstances affecting the profit. Tobacco companies are said to be heading into stormy sea with the future of smoking being in question. There are diversifications available however with smoke free cigarettes and the potential of other markets not currently maximised. Further research required here.

The Importance of the Company Dividend Policy

As the name of my blog suggests a company's dividend policy is the backbone to a lot of my investments (there are others which have no bearing on the dividend policy at all and some where the dividend policy is only a minor consideration).

As the well known saying goes "Actions speak louder than words." I mean anyone can say we're going to increase this by this amount and so on (should they not however then the shareholders wouldn't be impressed but it is possible that they could have such a short term outlook to keep the share price buoyant).

I find the best way identify to a company's intentions with regard to their dividend policy is to look at their dividend history and what dividends they have paid over the years. Now you can go back as far as you like but I find 6 years is plenty and gives a sufficient guide as to what they intend to pay in the future with regards dividends. It is worth noting here that the actual share price has no bearing on this exercise I'm just looking at the average dividend growth.

One of the powerhouses of dividend growth shares is British American Tobacco so I shall use this as an example.


            Dividend    Dividend Increase
2006       55.9p             
2007       66.2p              18.43%
2008       83.7p              26.44%
2009       99.5p              18.88%
2010       114.2p            14.77%
2011       126.5p            10.77%
2012       134.9p             6.64%

Clearly when identifying the dividend policy of a company the continued annual dividend increase is vital, any decrease in dividend over the 6 year period must be looked at and lead to the likely discarding of the share.

Above however you can see that British American Tobacco's dividend history shows that British American Tobacco's dividend policy is firmly one of dividend growth and strong dividend growth at that. Whilst there is a fluctuation over the years the average comes out at a strong 15.99%.

So following this calculation the higher this 6 year dividend growth average figure the better obviously but a single annual decrease in the dividend should be looked at closely as this demonstrates the company doesn't have such a strong dividend policy.

The importance of Dividend Reinvestment and DRIP's

For the benefit of the long term growth of any portfolio it is key to reinvest all dividends, should you not absolutely require the income there and then. This is known as a dividend reinvestment plan or a DRIP. The best way to explain this is like compound savings on steroids. Put simply all dividends you receive are then reinvested in shares of the company. If you don't need the funds at the time or you are looking to grow your portfolio this is a no brainer and the only way forward is to benefit from a DRIP.

To try to clarify, and this works best with companies who have a dividend policy of dividend growth. You earn a 10p dividend for every share you hold for example. Of the total dividend you receive you reinvest in more stocks. Say you manage to procure another 100 shares with your DRIP. The following year the company has a dividend policy of growth and decide to increase the dividend by a juicy 10%. Obviously this means that your dividend per share increases to 11p per share this year. So you have the dividend from your original shares (with an increase of 10% due to the increased dividend policy of the company but you also have the dividend of your extra 100 shares over and above this). You can see how quickly the dividend growth starts to take hold and accelerate the growth of the portfolio. There is no savings account in the land that decides to increase your return each year. That said whilst the dividend of a stock may well increase, you would also hope that the value of the stock increases so the dividend yield may well actually remain the same over time.

The plan with the dividend policy

As a total novice investor and having honed my investing through trial and error, which has been fairly costly in this arena I now have a number of criteria I try to fulfil before buying into a stock which has led me to devise the plan I try to stick to now which is the Dividend Policy. I first started out chasing the next big growth stock thinking I could make an exciting and captivating fortune in days rather than slow, dull growth over years. This tends to be through Penny Stocks and as any investor worth their salt knows that this is wholly unreliable and 19 times out of 20 the stock tanks rather than makes any serious gains.

It didn't take long before I realised this strategy was destined to ruination and looked for more reliable or predictable gains albeit at a slower rate. Now nothing in this game is certain and as we all know the value of stocks can go down as well as up and can leave us with nothing, thus the reason why you should only ever invest as much as you can afford to lose, so should I say something I had a better chance of predicting.

Stocks paying dividends are a way to secure cash without so much relying on the movements of the markets so I started turning my attention to these. With dividend paying stocks you receive an income from the shares that you hold (providing they pay a dividend) which can be reinvested in further shares as and when you receive them. Dividend paying companies tend to be larger companies with less volatile share prices and a more solid business structure meaning that they have less of a tendency to see large rises or falls in the share price.

I started out by thinking that when a dividend is announced that money is guaranteed from a company, which it generally is, for that year at least. There is nothing certain about the years to come however and the dividend can so easily be cut.

Again I suffered this fate at the hands of HMV. I looked at them as having a juicy yield (the yield is the dividend as a percentage of the share price) of around 10% which is huge. Needless to say the share price plummeted as HMV have since gone into administration. Fortunately I managed to cut my losses and came out fairly unscathed, many didn't. From this I learnt that you can't take the dividend in isolation and there are many other factors to consider as the dividend may be exceptionally attractive but if something looks too good to be true it generally is. Please see the post shortly for problems with excessive dividends and unreliability.

This scheme I have named the Dividend Policy, there is a reason for this which I'll detail shortly.

Tesco dividend policy stalls on slowing figures

As predicted Tesco full year results were walloped by the Fresh and Easy venture into the states. This has resulted in a freeze on the dividend policy. The final dividend of 10.13p per share will give a total annual dividend of 14.76p per share, the same as last year. A cut in dividend, whilst possible, would have sent a strong message reverberating around the markets suggesting that Tesco are prepared to cut the dividend, this would not wash at all well with the shareholders. The ex dividend date for the final dividend hasn't yet been confirmed however it will likely be very similar to last year which had an ex dividend date of the 25th April. As I stated above Tesco have seen a reduction in profit for this year. Whilst the overall sales have increased the cost of exiting the American market has cost them dearly and has hit the bottom line hard. The share price has opened well down this morning. The dividend policy is well covered however with a dividend cover of around 2.3. Once the market has settled down I think we will see future profits grow, I'll continue to hold.

Is the Tesco dividend policy to suffer from Fresh and Easy?

Tesco is to release it's results later this week however it has been suggested that it may be taking a £1bn hit as a result of the failure to penetrate the American market with their venture Fresh and Easy. Tesco has had a robust dividend policy of year on year dividend growth in recent history. They slogged away at this Fresh and Easy venture for a few years and like any other attempt by other companies to get into the market in America they failed and finally decided to cut their losses. This came as a relief to many shareholders believing the venture to be a money pit. We shall see what dividend is announced in the results on Wednesday and whether they stick with their dividend policy. I hold Tesco currently but will reassess my position following the results.

Chesnara's dividend policy looking strong but for how long

Chesnara, the insurance services provider, has maintained it's dividend policy and has again increased the dividend for the year having gone ex dividend a couple of days ago. Whilst it is worthwhile keeping an eye on this I am holding off taking a position as the dividend cover is only around 1.4 and I'm therefore unsure whether they will be able to continue this dividend policy should they hit a bump in the road. With a juicy 7.4% yield though it can't be overlooked and as such I will be keeping these on my watchlist monitoring their dividend policy.

National Grid updates it's dividend policy

National Grid today announced it's new dividend policy which is to apply from the 1st April 2013. This will incorporate the final dividend due to go ex dividend in a few months time whereby the update states that an increase of around 4% to the dividend can be expected to reflect this growing dividend policy. The dividend policy states that for the foreseeable future the National Grid dividend will be increased by at least RPI inflation or so they aim. Whilst this dividend growth policy isn't earth shattering it is progressive and it's not going backwards. How long this policy will be in place for nobody can ever be certain. Currently yielding 5% however this is in my eyes a slow burner but is a reasonable dividend growth stock for the portfolio. As a guide the stock went ex dividend on the 1st June last year so can only assume it will be something similar this year. In accordance with my dividend policy plan I am holding this for the long term.

Why buy gold? Seemingly it's price is linked to USA public debt, that's why.

I recently read an article that showed a correlation over the years of the gold price and American public debt. Now with American debt at over $16 trillion dollars, they are at the debt ceiling whereby they can't borrow any more money until the debt ceiling is shifted again. So will they have to move it, they will if they want to spend more cash. So will the price of gold increase? It probably will if this direct correlation that you can see here continues, unless of course you think that America will be able to keep it's borrowing at the current levels. I'm not so sure, that's why I'm buying gold and gold stocks.

British American Tobacco's dividend policy (almost) as reliable as clockwork

British American Tobacco (BATS) announced their final results this morning along with their dividend policy for the 2012 financial year. They confirmed a final dividend of 92.7p per share (going ex dividend on the 13/03/2013) giving a total dividend of 134.9p per share. This gives us an increase of 6.6% from last year. So as many investors expected British American Tobacco's dividend policy of dividend growth has held firm and they have managed to bump the dividend up again this year. It is far less impressive then it has been in recent years however of all the dividend growth stocks I own this annual growth seems to be better than most.

Hiscox sticks with the dividend growth policy

Whilst I employ a few strategies with trading, one is the dividend policy whereby I look for resonable stocks and shares who have consistently increasing dividends year on year. Well it is nice to see that in current times, especially as RSA recently cut their dividend, Hiscox have decided to stick with their dividend policy of growth and they have confirmed they will increase their dividend by 5.9% to 18p per share (from 17p per share) this year.

Carillion sticks with the dividend growth policy - just...

Carillion released their preliminary results for 2012 this morning and following their last 7 years of consistent dividend growth they have indeed increased their dividend again for the coming year, maintaining their dividend policy of dividend growth. The dividend is to increase by a marginal 2%, which is likely why the share price has been a touch hit today. Their earnings per share are up 16% to 37.2p per share. Carillion have seen a reduction in turnover this year however they have suggested that this is down to a move away from low margin contracts. The margins have increased however so it appears that this strategy may well be working. As previously stated, they have decided to only increase their dividend by 2%, this is from 16.9p per share to 17.25p per share. The final dividend of 11.85p per share will go ex dividend on the 15th May to be paid on the 14th June. Thie marginal dividend increase is likely down to the fact that there are uncertain times ahead and therefore the need to keep cash on the balance sheet. No matter though at today's prices with the forecast dividend in the results Carillion is yielding 5.55%, a the dividend policy confirms dividend growth year on year of 2%, and has a dividend cover of 2.25. I will continue to hold these for the long term.

African Barrick Gold taking a pasting

Well I bought back into African Barrick Gold after teh Chinese Government pulled out and the share price tanked down to around 355p per share. It does swing quite heavily so I thought this was a reasonable price to take a punt, especially as I made around 40% of my investment on my previous holiding. Well the recent results didn't come out so well and whilst gold stocks and gold companies do carry a heightened element of risk I still think that the entry point wasn't so expensive. What with America and their increasing debt I think gold and gold price still has some legs that why I'm buying gold stocks still. Should Aftrican Barrick Gold sort its production out I think the share price could see a fairly swift recovery.

Choosing the Dividend Growth stocks and shares

As the strategy suggests it is key to find shares who are going to grow their dividend and have a dividend growth policy in place. No one on this earth can predict what the future holds for sure, no matter what anyone says. That said the only way we can sensibly forecast the future is based on historic trends.
As such the first place we look is the dividend history of a company. I look back over 7 years and see that the company have seen dividend growth each and every year in that 7 year span. Over this period this gives a good idea that the company pursues a strong dividend growth policy. Any stocks or shares that don't have a continued growing dividend unfortunately don't cut the grade and are discarded. The reason for this growth in dividend is so that each and every year the dividend grows all by itself without us having to do anything. Naturally you would assume from this that the share price should also increase to accommodate the increased dividend maintaining the yield at around the same rate.