Investors seeking dividends either for income or reinvestment purposes had a pretty good thing going with most large, blue-chip companies back in 2007. Unfortunately, the sunny days of regular dividend payments and increases gave way to the dark reality that is the global economic meltdown and 2008 showed investors that any company at any time can substantially cut, or altogether eliminate, its dividend.

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Financials were leaders on the dividend slashing front. Formerly among the most steady dividend payers, large banks, such as Bank of America (NYSE:BAC) and Citigroup (NYSE:C) now pay a meager 1 cent a share in dividends because they have taken assistance from the Troubled Asset Relief Program (TARP).

Financials haven't been the only dividend slashers. This epidemic spread across a broad swath of industries. The outlook for dividends is in fact so dour that General Electric (NYSE:GE), America's largest dividend payer in dollar terms, looks poised to reduce what has historically been one of the most reliable dividends.

Believe it or not, there are companies increasing their dividends. Let's take a look at four:

Company Dividend Increase Quarterly Dividend Yield
Archer Daniels Midland (NYSE:ADM) $0.01 $0.14 2.0%
Avon Products (NYSE:AVP) $0.01 $0.21 4.2%
Honeywell (NYSE:HON) $0.025 $0.3025 4.0%
3M (NYSE:MMM) $0.01 $0.51 4.3%

As of market close February 18, 2009

Farming For Dividends
Archer Daniels Midland (ADM) is a dominant name in the agriculture and food commodities industries and that market position has led the company to be one of Wall Street's most consistent dividend payers. Granted, a 1 cent increase isn't going to fund your retirement, but these days, any increase is noteworthy.

Keep in mind that there are still a plethora of companies mulling dividend cuts and ADM is a market leader that just raised its dividend, which it has done for 34 consecutive years. The company now has a dividend yield of 2% and trades at a scant 1.3 times book value, though its enterprise value is almost one-third larger than its market cap. ADM is more a value than growth play, but there is something to be said for consistency and reliability in this market. The shares are down 7% this year. (Learn more about this in Build A Model Portfolio With Style Investing.)

A Pretty Payout
Despite the fact that its earnings outlook is bleak, Avon Products has found a way to deliver some value to its shareholders and that came with a recent dividend increase. The company is the world's largest direct seller of beauty products with $10 billion in annual sales and its recent dividend hike was its nineteenth. Paying 84 cents annually, Avon shares currently yield 4.2% and trade around 13.5 times book value. Beyond the dividend, there could be some nice capital appreciation in store for Avon shareholders when the global economy turns around as the company now generates half its sales from international markets.

Conglomerate Cash
Honeywell and 3M are both Dow components and two of the most familiar names to market observers. Neither company does anything that could be considered "sexy," but both quietly go about their business(es) and deliver solid dividend results for shareholders.

Honeywell has been steadily increasing its dividend since 2005 and the conglomerate now yields 4%. Besides the steady payout, investors should expect the shares to increase when the economy improves. The company is expected to be a main beneficiary of President Obama's stimulus package, which calls for improvements to the U.S. power grid, a key line of business for Honeywell. Honeywell shares look cheap here, trading at approximately 3.2 times book value and at a forward P/E ratio of 9.2

3M is another industrial conglomerate that has the dividend game down to a science. It currently pays 51 cents a quarter and its most recent boost was the fifty-first consecutive year in which it raised its dividend. The company now pays $2.04 a share annually, which is good for a 4.3% yield as of market close February 18, 2009. 3M also extended its $7 billion share repurchase program. (See what this could mean for investors, read A Breakdown Of Stock Buybacks.)

All is not well with 3M shares, though. Earlier this month, they reached a 52-week low and are down almost 20% this year. The company said it expects first quarter sales to plunge 15-18%. Then again, those statistics apply to many a lesser company and 3M has the appearance of a value play, trading at 3.5 times book value and around 10 times forward one-year earnings.

Get Paid For Buying Value
There is one simple fact that investors need to know about dividends: dividend paying stocks outperform their non-paying peers over the long-term. With that mind, Honeywell and 3M appear to be the best of the breed.

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