7 Companies Expected to Grow Dividends in 2013

Continuing a history of increasing payouts for dividend champions

   
7 Companies Expected to Grow Dividends in 2013

Over the past year, many companies kept increasing dividends. Payouts are expected to reach a record amount in 2013. Despite fears of fiscal cliff, the U.S. economy is doing fine, and corporate profits are also doing well. In a previous article I outlined why I am not worried about the fiscal cliff. Strong profits lead to stable and growing dividend checks. As a result, I expect companies in general to be able to distribute a record amount of cash to shareholders in 2013.

In this article, I have outlined several companies which I expect to reward their shareholders with the gift of dividend growth. Several of these companies have managed to boost distributions for over half a century each. These companies have consistently paid and raised distributions during situations where the top marginal tax rates exceeded 70%. Companies that follow such managed dividend policies are much more likely to keep boosting dividends, especially when their financial conditions are improving.

Johnson & Johnson (NYSE:JNJ), together with its subsidiaries, engages in the research and development, manufacture, and sale of various products in the health care field worldwide. In 2012 the company raised quarterly dividends by 7%, to 61 cents per share, marking the 50th consecutive annual dividend increase. The five year average dividend growth is 9.10% annually. Earnings per share are expected to increase to $5.09 in 2012 and $5.49 in 2013. I expect quarterly dividends to increase to 65 to 66 cents per share in 2013. Currently, the stock is attractively valued at 14.30 times earnings and yields 3.50%. Check my analysis of the stock for more information.

Coca-Cola (NYSE:KO), a beverage company, engages in the manufacture, marketing, and sale of nonalcoholic beverages worldwide. In 2012 the company raised quarterly dividends by 8.50%, to 25.50 cents per share, marking the 50th consecutive annual dividend increase. The five year average dividend growth is 8.70% annually. Earnings per share are expected to increase to $2 in 2012 and $2.19 in 2013. I expect quarterly dividends to increase to 27 to 27.5 cents per share in 2013. Currently, the stock is attractively valued at 18.90 times earnings and yields 2.80%. Check my analysis of the stock for more information.

McDonald’s (NYSE:MCD) franchises and operates McDonald’s restaurants in the global restaurant industry. In 2012 the company raised quarterly dividends by 10%, to 77 cents per share, marking the 36th consecutive annual dividend increase. The five year average dividend growth is 20.40% annually. Earnings per share are expected to increase to $5.31 in 2012 and $5.78 in 2013. I expect quarterly dividends to increase to 85 to86 cents per share in 2013. Currently, the stock is attractively valued at 16.60 times earnings and yields 3.50%. Check my analysis of the stock for more information.

Procter & Gamble (NYSE:PG), together with its subsidiaries, engages in the manufacture and sale of a range of branded consumer packaged goods. In 2012 the company raised quarterly dividends by 7%, to 56.20 cents per share, marking the 56th consecutive annual dividend increase. The five year average dividend growth is 11.20% annually. Earnings per share are expected to increase to $3.96 in 2013 and $4.30 in 2014. I expect quarterly dividends to increase to 60 to 61 cents per share in 2013. Currently, the stock is attractively valued at 18.90 times earnings and yields 3.30%. Check my analysis of the stock for more information.

Philip Morris (NYSE:PM), through its subsidiaries, manufactures and sells cigarettes and other tobacco products. In 2012 the company raised quarterly dividends by 10.40%, to 85 cents per share, marking the 5th consecutive annual dividend increase. The five year average dividend growth is 13.20%. Earnings per share are expected to increase to $5.21 in 2012 and $5.81 in 2013. I expect quarterly dividends to increase to 95 to 96 cents per share in 2013. Currently, the stock is attractively valued at 16.70 times earnings and yields 4.10%. Check my analysis of the stock for more information.

Chevron (NYSE:CVX), through its subsidiaries, engages in petroleum, chemicals, mining, power generation, and energy operations worldwide. In 2012 the company raised quarterly dividends by 11.10%, to 90 cents per share, marking the 25th consecutive annual dividend increase. The five year average dividend growth is 9 % annually. Earnings per share are expected to reach $12.55 in 2012 and $12.18 in 2013. I expect quarterly dividends to increase to $1 per share in 2013. Currently, the stock is attractively valued at 8.80 times earnings and yields 3.30. Check my analysis of the stock for more information.

United Technologies (NYSE:UTX) provides technology products and services to the building systems and aerospace industries worldwide. In 2012 the company raised quarterly dividends by 11.50%, to 53.50 cents per share, marking the 19th consecutive annual dividend increase. The five year average dividend growth is 12.70% annually. Earnings per share are expected to increase to $5.32in 2012 and $6.06 in 2013. I expect dividends to increase to 59 to 60 cents per share in 2013. The company typically raises distributions every five quarters. Currently, the stock is attractively valued at 16.80 times earnings and yields 2.60%. Check my analysis of the stock for more information.

Full Disclosure: Long JNJ, KO, MCD, PG, PM, CVX, UTX


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