Hunting for top names that are juicing payouts? Start right here
By
Kyle Woodley, Senior Investing Editor, Kiplinger
Jul 3, 2012, 8:30 am EST
If you ever needed evidence of the value of dividends, just take a look at the second quarter.
As the eurozone again looked prime for a collapse, and reports out of China indicated anything but the wildly breakneck growth the rest of the free world was hoping for, investors trampled each other on their way out of risky equities and into the sweet, gentle security blanket of income investments.
While a good amount of the money flying to income went into bond funds or dividend-equity funds, a number of stocks themselves were in red-hot demand. Take a look at the run-ups in both AT&T (NYSE:T) and Verizon (NYSE:VZ), each of which hit all-time highs despite any significant upgrades in their growth prospects. What did investors covet? Yields in the high 4 percents!
So, it’s hard to ignore the flurry of activity by board members in the past few months to keep boosting dividend payouts. In some cases, you have companies with hefty dividends just adding to the pile. In other cases, the hike doesn’t make a low yield that much more impressive, but does instill some faith in the business. In all cases, no one’s complaining about a little extra cash.
This group of companies featured in our weekly Companies Increasing Dividends lists includes your traditional dividend heavyweights, like energy, pharma and tobacco. And perhaps most impressive, it includes a full third of the Dow Jones Industrials Average!
It doesn’t get any blue-chippier than that!
If you’re hunting for some of the biggest movers in yield as of late, here’s a look at 40 of the biggest names on Wall Street upping their dividends, including the new payout, the percentage increase, yield based on the end-of-quarter stock price, and payment and record dates:
AON (AON)
New Payout
% increase
Yield as of 7/2
Payment Date
Record date
$0.1575/share
5%
1.33%
May 15
May 1
Barrick Gold (ABX)
New Payout
% Increase
Yield as of 7/2
Payment Date
Record Date
$0.20/share
33%
2.14%
June 15
May 31
Gold miners primarily are a way to get indirect exposure to gold, but a few of them — like Kinross Gold (NYSE:KGC, 1.9%) and Eldorado Gold (NYSE:EGO, 1.4%) — also throw out modest dividends. Barrick Gold (NYSE:ABX) kept up its status as one of the best current yields among miners with its second-quarter move to upgrade its dividend by almost a third to 20 cents a share. As of July 2, ABX shares throw off north of 2% in dividends.
Best Buy (BBY)
New Payout
% Increase
Yield as of 7/2
Payment Date
Record Date
$0.17/share
6%
3.06%
Oct. 2
Sept. 11
Caterpillar (CAT)
new payout
% increase
Yield as of 7/2
payment date
record date
$0.52/share
13%
2.49%
Aug. 20
July 20
Caterpillar (NYSE:CAT), the maker of construction and mining equipment, has been SOL in 2012. The slowdown in Chinese economic growth has weighed heavily on the Big Cat, leading to a steady decline in its share price since peaking in February. But CAT investors have at least one constant bright spot — its quarterly payout, doled out for almost 80 years without interruption. That consistency has landed Caterpillar on InvestorPlace‘s list of Dependable Dividend Stocks — and at a dividend yield of about 2.5%, it likely also has landed in numerous income investors’ portfolios.
Chevron (CVX)
New Payout
% Increase
Yield as of 7/2
Payment Date
Record Date
$0.90/share
11.1%
3.4%
June 11
May 18
Clorox (CLX)
New payout
% Increase
Yield as of 7/2
Payment date
Record date
$0.64/share
6.7%
3.71%
Aug. 10
July 25
Coach (COH)
New Payout
% Increase
Yield as of 7/2
Payment Date
Record Date
$0.40/share
33%
2.05%
July 2
June 4
Costco (COST)
New Payout
% Increase
Yield as of 7/2
Payment Date
Record Date
$0.275/share
14.6%
1.17%
June 8
May 25
Most of the big-time retailing spotlight has been on Wal-Mart (NYSE:WMT), which is celebrating its 50th birthday in absolute style with a run-up in share prices to decade-plus highs. But warehouser Costco (NASDAQ:COST) is pulling off a similar sprint after 13% year-to-date gains. And while investors show their confidence in Costco by driving up shares, COST management made its own statement with a nearly 15% dividend increase in Q2.
C.R. Bard (BCR)
new payout
% Increase
Yield as of 7/2
Payment Date
Record Date
$0.20/share
5%
0.74%
Aug. 3
July 23
CSX Corp. (CSX)
New Payout
% Increase
Yield as of 7/2
Payment Date
Record Date
$0.14/share
17%
2.52%
June 15
May 31
Dow Chemical (DOW)
new payout
% Increase
Yield as of 7/2
Payment Date
Record Date
$0.32/share
28%
4.06%
July 30
June 29
Duke Energy (DUK)
New Payout
% Increase
Yield as of 7/2
Payment Date
Record Date
$0.255/share*
2%
4.38%
Sept. 17
Aug. 17
* Adjusted to $0.765 for reverse stock split
Good ol’ utilities. Duke Energy‘s (NYSE:DUK) 2012 performance is right in line with its boring ol’ defensive play reputation — a steady 5% gain with a chart you could comfortably lie down on. In fact, the only real action DUK has seen as of late was its first day of trading in Q3, when the company enacted a 1-for-3 reverse stock split following the completion of its acquisition of Progress Energy.
DuPont (DD)
New Payout
% Increase
Yield as of 7/2
Payment Date
Record Date
$0.43/share
5%
3.48%
June 12
May 15
Exxon Mobil (XOM)
New Payout
% Increase
Yield as of 7/2
Payment Date
Record Date
$0.57/share
21.2%
2.67%
June 11
May 14
FedEx (FDX)
New Payout
% Increase
Yield as of 7/2
Payment Date
Record Date
$0.14/share
7.7%
0.61%
July 2
June 18
General Mills (GIS)
New Payout
% Increase
Yield as of 7/2
Payment Date
Record Date
$0.33/share
8%
3.39%
Aug. 1
July 10
Goldman Sachs (GS)
New Payout
% Increase
Yield as of 7/2
Payment Date
Record Date
$0.46/share
31.4%
1.89%
June 28
May 31
While financial stocks’ share momentum has mostly waned since their red-hot first quarter, Goldman Sachs (NYSE:GS) had one piece of good news in Q2: Its first dividend increase since December 2005, prompted by strong first-quarter results. And it was a whopper, too, at more than 30%! GS shares have since tanked almost 20%, however, bringing the yield to nearly 2%.
Humana (HUM)
New Payout
% Increase
Yield as of 7/2
Payment Date
Record Date
$0.26/share
4%
1.35%
July 27
June 29
Intel (INTC)
New Payout
% Increase
Yield as of 7/2
Payment Date
Record Date
$0.225/share
7%
3.15%
Q3*
N/A
* Date not announced as of this writing
It might not be the first sector that comes to mind when you think yield, but tech has several solid dividend citizens — and that includes Intel (NASDAQ:INTC). Intel has a sturdy business and a loyal customer base, but one thing it has been missing is a solid footing in mobile. But that void might be filled with the debut of the Microsoft (NASDAQ:MSFT) Surface, which features Intel processors in the higher-end versions. A potentially rejuvenated future can give you hope for growth — but even if INTC treads water, you can enjoy its 3%-plus yield.
International Business Machines (IBM)
New Payout
% Increase
Yield as of 7/2
Payment Date
Record Date
$0.85/share
13%
1.74%
June 9
May 10
Johnson & Johnson (JNJ)
New Payout
% Increase
Yield as of 7/2
Payment Date
Record Date
$0.61/share
7%
3.59%
June 12
May 29
KeyCorp (KEY)
New Payout
% Increase
Yield as of 7/2
Payment Date
Record Date
$0.05/share
66%
2.59%
June 15
May 29
Regional banks are another lesser-ballyhooed source of income, but KeyCorp (NYSE:KEY) and PNC Financial (NYSE:PNC) are two that yield well north of 2% and bumped up their payouts in the past three months. KeyCorp really impressed by juicing its dividend by 66%, to 5 cents per share.
Lowe’s (LOW)
New Payout
% Increase
Yield as of 7/2
Payment Date
Record Date
$0.16/share
14%
2.24%
Aug. 8
July 25
Marriott International (MAR)
New Payout
% Increase
Yield as of 7/2
Payment Date
Record Date
$0.13/share
30%
1.32%
June 22
May 18
Northrop Grumman (NOC)
New Payout
% Increase
Yield as of 7/2
Payment Date
Record Date
$0.55/share
10%
3.46%
June 13
May 28
PepsiCo (PEP)
New Payout
% Increase
Yield as of 7/2
Payment Date
Record Date
$0.5375/share
4.4%
3.04%
June 29
June 1
This stock features one of the most well-known drink brands in the world, has enjoyed decent gains for the first half of 2012 and yields more than 3%. If you guessed Coca-Cola (NYSE:KO), you’d be wrong. Perpetual soft-drink No. 2 (well, No. 3 if you bring Diet Coke into the conversation) PepsiCo (NYSE:PEP) bumped up its dividend last month, and it now yields 3% to KO’s 2.6%. Of course, both are solid sources of income with several avenues for international growth, so in this cola war, everybody wins.
PetSmart (PETM)
New Payout
% Increase
Yield as of 7/2
Payment Date
Record Date
$0.165/share
18%
0.97%
Aug. 10
July 27
PNC Financial (PNC)
New Payout
% Increase
Yield as of 7/2
Payment Date
Record Date
$0.40/share
14%
2.6%
May 5
April 17
Procter & Gamble (PG)
New Payout
% Increase
Yield as of 7/2
Payment Date
Record Date
$0.562/share
7%
3.67%
May 15
April 27
Reynolds American (RAI)
New Payout
% Increase
Yield as of 7/2
Payment date
Record date
$0.59/share
5.4%
5.18%
July 2
June 11
What’s more addictive than smoking? Tobacco dividends. And Reynolds American (NYSE:RAI) has been delivering smooth, unfiltered cash for years. This year, RAI needed its dividend boost just to keep up its phenomenal 5%-plus yield amid a 10% surge in its share price.
Rockwell Automation (ROK)
New Payout
% Increase
Yield as of 7/2
Payment date
Record date
$0.47/share
11%
2.92%
Sept. 10
Aug. 13
Southwest Airlines (LUV)
New Payout
% Increase
Yield as of 7/2
Payment date
Record date
$0.01/share
122%
0.43%
June 20
June 6
No one’s talking up a yield that’s solely right of the decimal point, but Southwest Airlines (NYSE:LUV) at least gets the nod for being the only big airline currently doling out a check of any sort. And after roughly a decade of using a knife to split pennies for its dividend, Southwest upped the ante with a 122% increase that brought its payout to a full cent per share. Don’t fork over the down payment on the yacht quite yet, but you can afford a little more confidence if you’re long LUV.
Target (TGT)
New Payout
% Increase
Yield as of 7/2
Payment date
Record date
$0.36/share
20%
2.47%
Sept. 10
Aug. 15
Tiffany & Co. (TIF)
New Payout
% Increase
Yield as of 7/2
Payment date
Record date
$0.32/share
10%
2.42%
July 10
June 20
The past few months have thoroughly tarnished a number of luxury stocks, but a couple bright spots came in the form of dividend hikes. Coach (NYSE:COH) boosted its dividend by 33%, and Tiffany & Co. (NYSE:TIF) bumped up its payout by 10%. Both yield more than 2% as of July 2, but both of those yields have been helped out by roughly 25% tumbles in company shares.
Kyle Woodley is the assistant editor of InvestorPlace.com. As of this writing, he did not hold a position in any of the aforementioned securities. Follow him on Twitter at@KyleWoodley.