2 Dividend Champs with Insider Buying

11/14/2011 11:55 am EST


These two stocks have raised dividends to shareholders for over 25 straight years and have positive recent insider buying, a combination that signals stable income and possible price appreciation ahead.

Who said trading and investing and making money had to be done in a hurry? For those of you seeking to avoid the thrills (and spills) of daytrading the stock market, here is a trusted investing idea: dividends!

While dividends won’t make an investor rich overnight, reinvesting dividends can help get you there over the course of time, and it can add some stability, too.

Dividend Champions

If you want to be able to rely on a stock’s dividend, one good sign of dividend sustainability is a long history of dividend increases. If a company has a long-standing policy of increasing payments to shareholders, it bodes well for the future.

Thankfully, the DRiP Investing Resource Center makes that task quite simple. Every year, they compile a list of so-called “Dividend Champions,” a list of companies that have consistently increased their dividend payouts for over 25 years straight. According to DRiP, there are currently 103 stocks on the list.

Insider Buying: A Bullish Indicator

Investors pay attention to insider activity for one simple reason: If they’re buying, then insiders are confident there is more upside potential and might have a hunch their stock is going to rally. Of course, these predictions aren’t always realized, but it’s a strong indicator for outsiders to go by.

Afterall, company insiders such as upper management and members of the company’s board know more about their companies than any other investors.

What’s more, dividend yield is a percentage of a company’s share price, so the higher the share price, the higher the return.

The List

Interested in exploring dividend champions? We scanned insider buying trends for all 103 companies on the list and could only find two companies that have seen significant net insider buying over the last six months.

These companies have a long track record of boosting dividend payments, and insiders appear to think these trends will continue. Do you agree with their bullishness?

Black Hills Corporation (BKH) operates as a diversified energy company primarily in the United States and has a dividend yield of 4.39%. Over the last six months, insiders were net buyers of 14,727 shares, which represents about 0.04% of the company's 38.98 million-share float.

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RLI Corp. (RLI), through its subsidiaries, underwrites property and casualty insurance primarily in the United States and has a dividend yield of 1.69%. Over the last six months, insiders were net buyers of 96,751 shares, which represents about 0.56% of the company's 17.21 million-share float. 

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By the Staff at Kapitall.com

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