Showbiz shares don't pay off
If investors are seeking growing dividends, are they better off with shares of a media company or a bank?
Even after the financial meltdown, the answer is a bank.
Indexing services provider Mergent identified 191 U.S. corporations that have increased their dividends for 10 or more consecutive years. While 6.3% of these “dividend achievers” are banks, not a single one is a major film or TV company.
Three publishers do make the list: McGraw-Hill (38 years of increases), which produces textbooks, owns four TV stations (now for sale) and provides financial data through Standard & Poor’s; John Wiley & Co. (17 years), which publishes professional books; and Meredith Corp. (18 years), owner of 12 TV stations and 21 magazines, including Ladies’ Home Journal.
In fairness, many media companies like to hold cash for acquisitions. But investors interested in long-term dividend growth should consider a soap company like Procter & Gamble, with 55 years of increases.