The markets roared through the majority of the first half, with the Dow Jones Industrial Average and S&P 500 managing to hit record highs in May before a pullback in June.
Perhaps just as important to investors come dividends. Dividend increases are the lifeblood of millions of investors who’ve built their portfolios on the steady stream of income provided by dividend-paying companies.
Hand in hand with dividend cash flows is the belief that a company will consistently increase its dividend, putting just that much more into an investor’s pocket on a quarterly basis.
After culling through our first-half list of Companies Increasing Dividends, we’ve come up with 10 of the best dividend increases based on a percentage basis. But just before we unveil the list, kudos to three companies that initiated dividend payments during the first half:
- EMC (EMC): 10 cents per share (1.7% yield at current prices);
- NetApp (NTAP): 15 cents per share (1.6%);
- SeaWorld (SEAS): 20 cents per share (2.2%).
Without any further ado, here’s the list of the InvestorPlace’s Top 10 Companies Increasing Dividends:
Oracle
Dividend Increase: 100%
It hasn’t been a particularly good first half for the enterprise software titan, but Oracle (ORCL), which has seen its stock price melt down 10% year-to-date, did manage to soothe some disappointed souls with a 100% increase in its dividend to 12 cents per share per quarter. The stock still yields a paltry 1.6%, but the table is set for many more years of dividend increases since ORCL’s payout ratio stands at 13%.
Ford
Dividend Increase: 100%
Ford (F) ended a five-year dividend hiatus that started in 2006 by paying a 5 cents a share dividend starting in 2011. With profits once again coming in, the company doubled up on the dividend, with investors now looking at 10 cents per share per quarter. Ford’s new dividend pays investors a very nice 2.54% yield, and analyst estimates put Ford on a path towards a 12 cents per share quarterly payout by 2014 — welcome news for long-term investors.
UnitedHealth Group
Dividend Increase: 31.8%
With Obamacare being rolled out, healthcare is in the headlines, and UnitedHealth Group (UNH) made some news of its own with a hefty dividend hike that now pays out at 28 cents per share per quarter to investors. With its stock price nearing its historical high point, the dividend yield is a bit measly at 1.74%, but UNH has increased its dividend in each of the past 10 years.
Whirlpool
Dividend Increase: 25%
Whirlpool (WHR) isn’t one of those dividend-paying stocks that immediately comes to mind when it comes to consistent increases, yet the company has raised its annual dividend over the past 30 years, all while managing to keep a pretty low profile. Add this quarter’s 62-cents-per-share payout for a nice 2.17% dividend yield, and the company has done it again. With a cash stash of more than $750 million and another $200 million in free cash flow, its a pretty good bet WHR will continue its dividend increase streak in 2014.
Macy’s
Dividend Increase: 25%
The retail sector is rebounding nicely through the first half of the year, and Macy’s (M) rewarded shareholders for its own solid performance with a boost in its dividend to 25 cents per share, a nice 2.11% dividend yield. And what a performance it’s been for the venerable retailer: The stock price is up over 20% year-to-date, with strong top- and bottom-line growth sending investors into the stock. It’s all looking very good for a strong showing for the remainder of 2013.
American Express
Dividend Increase: 15%
If retailers are doing well, chances are financial services companies are seeing the benefits, and American Express (AXP) is doing very well indeed — and the company rewarded investors with a nice dividend bump up to 23 cents per share per quarter. AXP is yet another company that’s seen a major stock price move (up 28% year-to-date) that’s bitten into its pedestrian 1.25% dividend yield. AXP is seeing great results from the rollout of its Bluebird prepaid debit card program, and the rest of the year looks like a winner, too.
Caterpillar
Dividend Increase: 15%
It’s been a difficult and disappointing first half for Caterpillar (CAT) as its stock is one of the few in the Dow Jones average to show a loss (8.65%) during the year. However the company rewarded shareholders with a new payout of 60 cents per share per quarter, which today yields investors just under 3%. CAT is still in strong financial shape, and InvestorPlace contributor James Brumley views the stock with cautious optimism. While you wait for the rebound, keep cashing those dividend checks.
IBM
Dividend Increase: 12%
It hasn’t been a very good half-year for IBM (IBM), as the stock’s 1.75% appreciation lags well behind the Dow returns, but that didn’t stop Big Blue from upping its payout to 95 cents per share per quarter. IBM’s dividend yield is still just a shade under 2% despite the lagging stock price, but long-term dividend investors have every belief IBM will continue to build on what is now the 18th year in a row for a dividend increase, and the 10th year of double-digit percentage increases.
Clorox
Dividend Increase: 11%
Dividend increases are simply old hat at InvestorPlace Dependable Dividend payer Clorox (CLX) — its bump up to 71 cents per share represents the 39th consecutive year the consumer and commercial products maker has raised its dividend. With its strong product brand lineup including Greenworks, Pine-Sol and Glad Bags, Clorox is one of the consumer stock staples of dividend investor portfolios, and its juicy 3% dividend yield makes it a great buy at any time. Expect another hike for 2014 to make it an even 40-year increase history.
Federal Express
Dividend Increase: 7%
Transportation, logistics and ecommerce giant Federal Express (FDX) is a bit of a laggard in our first-half group, with a single-digit increase that provides investors with a 15-cents-per-share-per-quarter payout, and a minuscule 0.61% dividend payout. The company’s been paying out an incrementally increasing dividend since 2002, so its unlikely it will reduce it in 2014 … but the company is undergoing some structural changes, with 3,600 employees accepting a “voluntary retirement” package and the company retiring 10 aircraft from its fleet. The streamlining is expected to boost revenue in 2014, but the jury is still out on stock performance.
Marc Bastow is an Assistant Editor at InvestorPlace.com. As of this writing he did not hold a position in any of the aforementioned securities.
