Four Stocks with Rising Dividends… and Special Perks

Buy low, sell high.

That’s the goal, right? The endgame. To enter a stock at one price and eventually exit at a better one. And if we collect a few dividend distributions along the way, even better. But is that all?

Well, most share classes also offer some type of voting privileges, giving the rank and file a say in board representation, executive compensation, potential acquisitions and other important matters. Ownership also typically means an open invitation to a company’s annual shareholder convention.

That alone is a huge selling point for Berkshire Hathaway (NYSE: BRK-A). Every spring, swarms of people flock to Omaha, Nebraska to hear Warren Buffett’s keynote address and mingle with like-minded shareholders at the yearly “Woodstock for Capitalists” celebration.

What began as a small affair for a handful of suits in 1965 is now a weeklong gala with 40,000 attendees. It has been described as almost a religious experience. Some go for the investment workshops, others for the fun and camaraderie.

Perhaps the best fringe benefit is the “Bazaar of Bargains”, where Berkshire subsidiaries fill a 20,000 square foot arena with special merchandise and offer deep discounts on everything from candy to jewelry to furniture. Dairy Queen (part of the conglomerate since 1998) is on hand to sell $1 frozen treats. The Brooks booth features branded hats and running shoes.

It’s only open to Berkshire Hathaway shareholders. Of course, the stock itself has done ok as well. As a write, it’s up $5,868 this morning and trading at $734,668.

If you’re wondering, there are a few other companies that offer special perks to their investors. Carnival (NYSE: CCL) extends cruisers a generous onboard room credit. Churchill Downs (NSDQ: CHDN) gives shareholders a pair of season passes. Willamette Valley Vineyards (NSDQ: WVVI) offers a 25% bottle discount and access to special winery tastings.

Here are four more with notable “extras”.

InterContinental Hotels (NYSE: IHG)
Overview: IHG is an American Depositary Receipt (ADR) of a London-listed stock. The company has built a global collection of 15 popular brands from budget to luxury, including Holiday Inn, Candlewood Suites, Crown Plaza and the namesake InterContinental.

Rather than owning properties outright, IHG has adopted a franchise model, whereby it collects licensing income and managerial fees. These predictable, recurring revenues flow regardless of whether the hotels are full or empty. So the company is largely insulated from travel downturns (not that we’re in one).

Owned properties account for just 1% of revenues, while franchise royalties and management fees bring in 99%. This “asset-light” approach requires less capital and maintenance expense, allowing lofty free cash flow generation.

There are currently 6,600 hotels flagged under one of IHG’s brands in 100 countries worldwide. These properties contain 987,000 hotel rooms, with another 334,000 in the development pipeline. In the meantime, revenues per available room (RevPAR) are running 11% ahead of pre-Covid levels.

Dividend: Like many European companies, ING makes semi-annual distributions, paying out an interim dividend in the third quarter and then a larger final payment after the end of the fiscal year.

These payments have been raised or maintained every year since 2003, climbing at a robust double-digit pace. Over that time frame, the company has returned more than $15 billion in dividends to stockholders.

The current trailing distribution of $2.81 per ADR puts the yield at an above-average 2.4%.

Perk: You could log on to Expedia to book a hotel room at Holiday Inn or one of IHG’s other resorts. But shareholders have special access to a private website with deeper (unpublished) discounts. Further details are available at the company’s website.

Ford (NYSE: F)
Overview: Ford doesn’t really need much of an introduction. The iconic automaker sold 220,000 vehicles in the U.S. last month alone, with average transaction prices climbing to a record $55,000. The ever-popular F-150 line of pickup trucks has been the nation’s best seller for 48 straight years.

I like Ford’s improved manufacturing efficiency and shift toward more profitable vehicles, which brought in $3.7 billion in cash flow last quarter. And there is $27 billion in cash on the improved balance sheet.

Dividend: Despite industry headwinds, quarterly dividend distributions have been maintained at $0.15 per share or $0.60 annually. The company has also paid special dividends in each of the past three years, with the goal of distributing up to 50% of its free cash flow.

At current prices, the trailing yield stands at 6.6%.

Perk: Shareholders get privileged rates well below sticker price. In some cases, cars and trucks can be purchased for just 4% above employee pricing. Here’s what the company has to say.

As a special thank-you to our shareholders, we offer qualifying shareholders the opportunity to participate in our “Friends & Neighbors” Special Vehicle Pricing Privilege (also known as our “X-Plan”). To qualify for this offer, you must be a current Ford Motor Company shareholder who has held a minimum of one hundred (100) shares of Ford Motor Company stock for at least the past 6 months. Qualifying shareholders are limited to one PIN per 12-month period.

IBM (NYSE: IBM)
Overview: IBM is widely referred to as “Big-Blue” for its status as the bluest of blue-chip stocks. The tech juggernaut is involved in everything from legacy computer mainframes to newer ventures such as cloud computing and artificial intelligence.

After years of sluggish top-line growth, IBM has started to turn things around, particularly in emerging markets (where revenues are growing in 70 countries). The software division is currently leading the way with a healthy 9% uptick in revenues last quarter.

Thanks to a talented research and development bench and a wealth of patents, IBM is making strategic investments in the technologies of tomorrow. In the meantime, the company is on track to deliver massive free cash flows of $13.5 billion this year, much of which will be returned to stockholders.

Dividend: IBM has increased dividends for 30 consecutive years, doubling the quarterly payout from $0.85 per share in 2012 to the current $1.68.

Perk: IBM’s products are mostly marketed to other businesses rather than consumers. But stockholders are given a passcode to enter a special retail store. Once inside, you’ll find generous discounts on Lenovo laptops and other products.

Kimberly Clark (NYSE: KMB)
Overview: Kimberly Clark is one of the world’s leading suppliers of diapers and feminine products. The Dallas-based company owns five different billion-dollar brands, with products on the shelves in 175 countries worldwide and a dominant No. 1 or No. 2 market share position in half of them. about one-fourth of the world’s population uses KMB products daily, generating $20 billion in annual sales.

Dividend: It takes at least 25 consecutive years of annual dividend hikes to be considered a so-called Dividend Aristocrat. Kimberly Clark has met that lofty goal twice, having raised dividends for 53 straight years. The latest increase puts the quarterly distribution at $1.26 per share for a sizeable yield approaching 4%.

Perk: What better way to engender brand loyalty than to give stockholders a special gift box full of your best-selling products. For a modest fee, investors are mailed a box chock full of Kleenex wet wipes, Scott paper towels and other essentials. It also contains a stack of valuable coupons. Kimberly Clark has shipped several million of these gift packages since the program was started in 1957.