Dividends Talk -- Emerson Electric

I am on the lookout for the dividend increases of important dividend-paying companies. My belief is that in these post-hurricane times, the amount of the increase will say as much about the future as the past. Thus far, I have commented on Paychex, a payroll processing company, and Carnival Cruise Line, an entertainment company. Both blew away their dividend estimates, which is important because both companies offer a glimpse of the thinking of corporate America about the prospects for the coming year. Emerson Electric -- EMR raised their dividend 7.2%, or about three times what Value-Line was estimating. EMR is a major industrial company providing process management and industrial automation to companies worldwide. It is a clear Dividend Star, having increased its dividend for over 48 years in a row. Earnings grew 18% for the quarter, which was also above the estimates. The reason EMR's above-estimates dividend hike is important is because they are are a leading company in the capital goods sector, which has been very strong in 2005. Some people are worried that this sector will slow in the coming year due to a slowing worldwide economy, resulting from rate hikes in the US and abroad. While I believe EMR could have increased their dividend just a bit more, they do have a stated dividend policy and the 7.2% increase was within those guideline. I'm going to rate the EMR dividend increase as neutral. We'll keep a running score on dividends hikes for a few months. So far Dividend Scoreboard Number of positive surprises 2 Number of neutral increases 1 Number of negative surprises 0