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Tractor Supply Company (TSCO - Analyst Report) is an intriguing option for investors seeking both growth and income. The operator of farm and ranch stores in the U.S. announced its decision of a dividend hike, reflecting its plan of utilizing free cash to enhance shareholders’ return, thereby boosting investors’ confidence in the stock.

The Brentwood, TN-based company, raised its quarterly dividend by 23% to 16 cents (or 64 cents annually) from 13 cents a share (or 52 cents annually). The increased dividend will be paid on Jun 3, 2014, to stockholders of record as of May 19. The dividend yield based on the new payout and the last closing market price is approximately 1%.

Dividend hikes not only enhance shareholder’s return but raise the market value of the stock. Through this strategy, the companies try to win investors, thereby persuading them to either buy or hold the scrip instead of selling them.

Investors prefer an income generating stock and a dividend paying stock is always a preferable option. People looking for regular income from stocks are most likely to be inclined toward those companies that have a track record of consistent and incremental dividend payment.

Other companies that recently increased quarterly dividend include Apple Inc. (AAPL - Analyst Report) and Costco Wholesale Corp. (COST - Analyst Report). The companies raised their dividends by 8% to $3.29 and 14.5% to 35.5 cents, respectively. Another company, MetLife, Inc. (MET - Analyst Report) recently hiked its dividend by 27% to 35 cents.

We believe that Tractor Supply continues to progress well with its growth initiatives, which include expanding its store base and incorporating technological advancements to serve clients better. This Zacks Rank #3 (Hold) company leverages an extensive network of stores to penetrate into target markets, which in turn, enables the company to generate healthy sales and gain market share.

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