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4 companies that grew dividends by more than 20% this year

It’s a great feeling as an investor to own a company with growing dividends. A growing dividend often (though not always) signals that a company is improving its performance and increasing cash flows.

Not every company increased its dividend this earning season, and some companies paid out less. These four companies increased their dividends by 20% or more.

Auckland-based gaming and casino operator SkyCity Entertainment (ASX: SKC) announced a 25% increase to its dividend after it had a solid year. Revenues increased just 0.7%, but it was following on from a year when it benefited greatly from the Rugby World Cup in New Zealand, which pushed up 2012 earnings.

SkyCity’s final dividend was increased from NZ$8 cents per share (cps) to NZ$10cps. The company also announced plans for two big convention centre projects in Auckland and Adelaide, which it hopes will draw more customers and grow revenues going forward.

 Company

Dividend last year (cps)

Dividend this year (cps)

Percent change (%)

Ramsey Health Care (ASX: RHC)

34.5

41.5

20.3%

CSL  (ASX: CSL)

47

56.98

21.2%

SkyCity Entertainment  (ASX: SKC)

(NZ$) 8

(NZ$) 10

25%

Woodside Petroleum  (ASX: WPL)

(US$) 65

(US$) 83

27.7%

Source: Company announcements and websites

Woodside Petroleum (ASX: WPL) also announced a sharp increase to its interim dividend for the year, lifting it by 27.7% to US$83cps. Woodside’s dividend comes fully franked and since it is set in US dollars, will work out to be even greater for Australian shareholders given the more favourable exchange rate year on year.

Woodside is currently between major projects which puts it in a period of relatively low capital expenditure. Cash flows are also high thanks to strong LNG production from the company’s Pluto LNG processing plant, so the board has elected to increase its payout ratio to investors. The higher dividend comes on top of a bonus US$ 63cps dividend paid in May.

Two strong performing healthcare companies, CSL (ASX: CSL) and Ramsey Health Care (ASX: RHC), also lifted their dividends by just over 20%. CSL, the blood care and vaccine company, had a great year lifting net profit after tax (NPAT) for the year 18.8% to US$1.22 billion. The company rewarded shareholders with a 21.2% increase to its final dividend.

Foolish takeaway

The four companies not only increased dividends, but also have positive outlooks for their future earnings. Over time, investors should see these dividends grow further, even if it is at a slower rate than the 20% achieved this year.

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Motley Fool contributor Regan Pearson owns shares in SkyCity.

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