11 Companies that Just Started Paying Dividends

Vardah Gill
9 min read

In This Article:

In this article, we discuss 11 companies that just started paying dividends. You can skip our detailed analysis of dividend stocks and their performance over the years, and go directly to read 5 Companies that Just Started Paying Dividends. 

Investors have long shown favor towards dividend stocks, prompting US companies to actively pursue the establishment, growth, and maintenance of their dividend policies. Conversely, companies are generally averse to reducing dividends due to the negative impact it has on public perception. Therefore, when a company opts to increase its dividend, it typically indicates that the board believes the higher payout is sustainable and well-founded. In 2023, the S&P 500 set a new annual record by paying $70.30 per share, marking an increase from the $66.92 paid in 2022. The total payout to shareholders reached a record-breaking $588.2 billion, surpassing the previous year's figure of $564.6 billion, according to a report by S&P Dow Jones Indices. The report further highlighted a quarterly increase in total dividends, with a rise from $16.3 billion in Q4 2022 to $17.5 billion.

The significance of this dividend payout figure becomes apparent when analyzing the performance of dividend stocks in 2023. The importance lies in the fact that dividend equities faced a challenging year in the preceding period, primarily due to the dominance of the tech rally, resulting in underperformance. The S&P 500 Dividend Aristocrats index, which tracks companies that have consistently raised their dividend payments for the past 25 years, experienced a 5.7% increase in the previous year. This performance is notably lower when compared to the 26% gain in the S&P 500 total return index during the same period. However, analysts at Morgan Stanley are optimistic about the potential resurgence of dividend stocks in the current year. The decline in yields towards the end of 2023 is noted, and there is anticipation that they may further decrease if the Federal Reserve decides to reduce interest rates. Here is their statement in one of their investors' notes:

“Investors are seeking durable, higher yielding dividends as market volatility is expected to continue throughout the easing cycle.”

In addition to the strong outlook of dividend stocks, the historical performance of companies that consistently increase their dividends has demonstrated resilience and strength over the years. According to data from Morgan Stanley dating back to 2014, companies within the Russell 1000 index that chose to raise their dividends experienced an average outperformance of 3.1% in stock prices over the six months following the announcement of the increase. Conversely, those companies that opted to lower their dividends witnessed an underperformance in stock prices, averaging 4.7% during the same period.

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