Dividend stocks continue to be a hot place for new investment money amid a rocky market that has delivered pain to the bulls and bears alike.
One of the easiest places to look for dividend stocks is the Dow Jones Industrial Average, the venerable 30-stock index of well-known blue-chip companies. Every stock in the Dow pays a dividend, though with a range of less than 1% to more than 5% … well, not all Dow Jones dividend stocks are built alike.
A few Dow Jones dividend stocks have been sweetening the pot of late, tacking on a little bit more cash onto their regular payouts — not just a nice bonus for investors, but a show of financial stability that gives any shareholders a little more comfort at night.
In particular, there’s a quintet of higher-yielding Dow Jones stocks that have boosted their quarterly dividends. In no particular order, here’s a look at five Dow blue bloods that yield more than 3% and have increased their payout sometime over the past few months.
Dow Jones Dividend Stocks: Cisco Systems (CSCO)
CSCO Dividend Yield: 3.6%
Latest Increase: Announced Feb. 10 (+24%)
It’s not often talked about anymore, but Cisco Systems Inc. (CSCO) was once the largest American stock by market capitalization, taking up a mantle held by more well-covered Apple Inc. (AAPL) and Alphabet Inc (GOOG, GOOGL).
While Cisco no longer holds that honor, the company — which is one of the newest Dow Jones stocks, joining in 2009 — still is a $135 billion giant with plenty of cash to dole out.
Earlier in May, CSCO announced third-quarter earnings that beat analysts’ forecasts and issued strong Q4 guidance. The company has been succeeding via M&A deals for smaller businesses and putting a higher focus on high-growth areas like networking and security.
Cisco isn’t a long-time dividend payer, but it has raised its dividend substantially since starting payouts in 2011. After initially paying 6 cents quarterly, it has jacked its payout up to 26 cents per share, which includes the most recent 24% bump to the dividend.
Better yet, the annual dividend of $1.04 is less than half of the company’s expected $2.32 in earnings this year.
Dow Jones Dividend Stocks: International Business Machines (IBM)
IBM Dividend Yield: 3.7%
Latest Increase: Announced April 26 (+8%)
International Business Machines Corp. (NYSE:IBM) has raised its payout for 16 consecutive years, and at 3.7%, IBM is among the five highest-yielding stocks in the Dow Jones Industrial Average.
Helping IBM was the company’s hike to 8% last quarter, putting the annual figure at $5.60, which IBM could cover twice and then some with this year’s expected earnings of $13.53.
The company posted a strong first quarter, and despite posting its 16th consecutive sales decline, it beat estimates for both earnings and revenue, led in large part by its cloud services, which saw sales growth in double digits. IBM also is shifting more of its focus toward areas like data analytics and security.
IBM’s dividend will be paid out on June 10.
Dow Jones Dividend Stocks: Exxon Mobil (XOM)
XOM Dividend Yield: 3.3%
Latest Increase: Announced April 27 (+3%)
Exxon Mobil Corporation (XOM) is the second oldest member of the Dow Jones Industrial Average, trailing only General Electric Company (GE). The company was first a member when it was known as Standard Oil Co. of New Jersey.
Exxon Mobil is just like the rest of the energy world in that it’s seeing pressure on margins and earnings amid a lower-price environment for oil … but that’s also rebounding amid a recovery in black gold. Still, after posting earnings of $3.85 per share in its previous fiscal year, Wall Street thinks that number will decline to $2.64 this year.
Yes, Exxon Mobil was downgraded by Standard & Poor’s, with its credit dropping from AAA to AA+ for the first time in 70 years — but that came amid the fact that XOM is focusing on paying shareholders rather than not eliminating more debt.
Exxon has paid uninterrupted dividends since 1882, and the company has spent $325 billion on dividends and share buybacks over the past 11 years.
Dow Jones Dividend Stocks: Procter & Gamble (PG)
PG Dividend Yield: 2.9%
Latest Increase: Announced April 8 (+1%)
One of the most consistent dividend stocks in the world is Procter & Gamble Co (PG). A member of the Dow Jones Industrial Average since 1932, PG has paid and raised its dividend for 59 consecutive years, although the most recent one was a scant 1% improvement.
Procter & Gamble is in the middle of a massive brand shakeup dating back to 2014 that could decide the fate of the company. The company previously announced a plan to sell of discontinue up to 100 brands. The shift would leave the company with 80 key products that make up the majority of the company’s profits. Through this initiative, P&G has jettisoned prescription drugs, food and batteries through sales to other companies.
In the most recent quarter, Procter & Gamble saw all segments post declining sales, and revenues down 7% to $15.8 billion were shy of analysts’ estimates. However, earnings of 86 cents per share came in higher than estimates, and P&G enjoyed significant cost savings and improving operating margins.
Maybe the brand selloff is paying off. Either way, as long as the company keeps raising its dividend, PG stock will have some built-in demand.
Dow Jones Dividend Stocks: Walmart (WMT)
WMT Dividend Yield: 3%
Latest Increase: Announced Feb. 18 (+2%)
Wal-Mart Stores Inc. (WMT) joined the Dow Jones Industrial Average in 1997, and it not only has returned nearly 500% since then, but it has gone on to be a top dividend stock.
WMT was a rare breath of fresh air in the retail space this quarter, as it reported first-quarter revenue of $119.4 billion, growth of 4% on a constant currency base. The company beat estimates for earnings and revenue and posted a positive same-store sales increase for the U.S. segment for the seventh consecutive quarter.
Walmart has 11,527 stores in 28 countries and continues to growth through international expansion and small acquisitions. The company is also putting a strong bet on growth in e-commerce, where it operates in 11 countries. In the first quarter, e-commerce sales were up 7%, and the company plans on adding additional countries to the fold.
Walmart has increased its dividend for 41 consecutive years — an impressive streak that was extended in February with a 2% increase. That payout is easily sustainable, too, as the company’s annual dividend of $2 is less than 50% of analysts’ estimate of $4.26 per share for the fiscal year.
As of this writing, Chris Katje did not hold a position in any of the aforementioned securities.