In this article, we discuss 10 Dow stocks that will boost their dividends soon. You can skip our detailed analysis of dividend stocks and their performance over the years, and go directly to read These 5 Dow Stocks Will Boost Their Dividends Soon.
The Dow Jones Industrial Average, known as the Dow, is a famous stock market index in the US and worldwide. It follows the performance of 30 companies traded on US stock exchanges. These companies represent different industries, giving the index a diverse view of the stock market. In 2023, the DJIA closed the year with a notable 13.7% increase, marking a significant gain for investors. Throughout the year, the index also achieved a new record high, signifying the strength and upward momentum of the stock market.
Many of the companies included in the Dow are known for paying dividends. These dividends can be an attractive feature for investors seeking income from their investments. The "Dogs of the Dow" strategy is a well-known investment approach within the DJIA. It involves selecting and investing in stocks from the DJIA that have the highest dividend yield. The strategy has shown mixed performance over the years. In the last five years, the Dogs performed worse than the S&P 500 and the Dow on four occasions, including in 2023, as reported by Barron’s. The report also mentioned that over the span of 20 years from the end of 2023, the Dogs' average annual return was slightly above 8%, including dividends. This trails behind the S&P 500 by a little over 1% each year. However, at the end of 2018, when observing from the end of 2003, the Dogs were actually leading the S&P 500 by approximately 1% per year.
Many companies within the DJIA pride themselves on a history of dividend growth and maintain a consistent track record of increasing payouts to shareholders. However, economic challenges, shifts in industry trends, or company-specific circumstances may lead certain Dow components to maintain stable but unchanged dividend levels, or in some cases, even decrease their dividends. For example, Walgreens Boots Alliance, Inc. (NASDAQ:WBA) recently made headlines with a significant decision to reduce its dividend payouts. This decision is notable because it breaks a streak of 48 consecutive years of increasing dividends. The company had been known for its consistent and long-standing commitment to raising dividends, making this move quite unexpected and significant within the financial community. However, certain firms within the DJIA, like Johnson & Johnson (NYSE:JNJ) and The Procter & Gamble Company (NYSE:PG), have consistently increased their dividends for many years. In this article, we will discuss some of the Dow stocks that will boost their dividend soon.
These Dow Stocks Will Boost Their Dividends Soon
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Our Methodology:
To compile this list, we examined the 30 stocks listed in the Dow Jones Industrial Average and specifically focused on dividend-paying stocks among them. From this pool, we picked out three stocks that have recently increased their dividend payouts within the last three months. Additionally, we identified seven stocks that, judging by their historical dividend growth patterns in previous years, show strong potential to raise their dividends in the coming months. This analysis was based on the companies' track records of dividend growth, indicating a likelihood of continued upward trends in their dividend payments. The stocks are ranked in ascending order based on their current and anticipated dates for dividend growth.
JPMorgan Chase & Co. (NYSE:JPM) is a leading global financial services firm that operates in various segments of the financial industry. On December 12, the company announced a quarterly dividend of $1.05 per share, having raised it in September 2023. As of January 5, the stock has a dividend yield of 2.45%.
In the third quarter of 2023, JPMorgan Chase & Co. (NYSE:JPM) posted revenue of roughly $40 billion, which showed a 22% growth from the same period last year. During the quarter, the company returned $3.1 billion to shareholders through dividends.
At the end of Q3 2023, 109 hedge funds in Insider Monkey's database reported having stakes in JPMorgan Chase & Co. (NYSE:JPM), growing from 106 in the previous quarter. These stakes have a total value of more than $6.6 billion.
ClearBridge Investments mentioned JPMorgan Chase & Co. (NYSE:JPM) in its Q3 2023 investor letter. Here is what the firm has to say:
“In addition to business models that support biodiversity, it is also important to provide financing for efforts to improve biodiversity. Large financial firms such as ClearBridge holding JPMorgan Chase & Co. (NYSE:JPM) have a key role here through green bond underwritings that support natural capital protection. In 2021 JPM announced a target to finance and facilitate $1 trillion toward green initiatives by 2030 as part of its broader $2.5 billion sustainable development target. The green initiatives include biodiversity-linked areas such as water management, circular economy and waste management, in addition to conservation and biodiversity, which focuses on improving terrestrial and aquatic biodiversity ecosystems or forests.
Honeywell International Inc. (NASDAQ:HON) is a multinational conglomerate that operates in various industries and provides a wide range of products and services. In the third quarter of 2023, the company posted a strong cash position, with its operating cash flow coming in at $1.8 billion with an operating cash flow margin of 19.6%. In addition to this, the company generated $1.6 billion in free cash flow. It returned $2 billion to shareholders during the quarter through dividends.
Honeywell International Inc. (NASDAQ:HON) last raised its dividend on September 29, 2023, by 5%, which took its per-share quarterly dividend to $1.08. This marked the company's 14th dividend hike in 13 consecutive years. The stock's dividend yield on January 5 came in at 2.11%.
As of the close of the third quarter of 2023, 60 hedge funds tracked by Insider Monkey owned stakes in Honeywell International Inc. (NASDAQ:HON), compared with 61 in the preceding quarter. The consolidated value of these stakes is over $2.27 billion. With nearly 2 million shares, Adage Capital Management was the company's leading stakeholder in Q3.
Amgen Inc. (NASDAQ:AMGN) is a global biopharmaceutical company primarily focused on developing and manufacturing therapeutics for serious illnesses. On December 12, the company announced a 5.6% hike in its quarterly dividend to $2.25 per share. Through this increase, the company stretched its dividend growth streak to 11 years. The stock offers a dividend yield of 2.97%, as of January 5.
Amgen Inc. (NASDAQ:AMGN) generated over $2.5 billion in free cash flow in the third quarter of 2023. Its operating cash flow for the quarter came in at $2.8 billion. In addition to this, the company returned more than $1.1 billion to shareholders through dividends during the quarter.
The number of hedge funds tracked by Insider Monkey owning stakes in Amgen Inc. (NASDAQ:AMGN) grew to 60 in Q3 2023, from 57 in the previous quarter. The collective value of these stakes is over $2.16 billion.
Expected Month for Dividend Increase: January 2024
Chevron Corporation (NYSE:CVX) is one of the largest multinational energy corporations that operates in various sectors of the energy industry. The company has a 36-year history of growing its dividends, and last year, it declared a dividend increase of 6.3 on January 25. This announcement aligned with their historical pattern of boosting dividend payouts around a similar timeframe in previous years. The company currently offers a quarterly dividend of $1.51 per share and has a dividend yield of 4.01%, as of January 5. It is one of the prominent Dow stocks that will boost their dividends soon.
In the third quarter of 2023, Chevron Corporation (NYSE:CVX) reported an operating cash flow of $9.7 billion. Year-to-date, the company returned nearly $20 billion to shareholders, which showed a 27% growth from last year's record total for the same period.
Chevron Corporation (NYSE:CVX) was a part of 72 hedge fund portfolios at the end of Q3 2023, compared with 73 in the preceding quarter, as per Insider Monkey's database. The stakes owned by these hedge funds have a total value of over $21.4 billion.
Expected Month for Dividend Increase: February 2024
An American multinational conglomerate, 3M Company (NYSE:MMM) is one of the Dow stocks that will boost their dividends soon. In February 2023, the company increased its dividend for the 65th consecutive year, continuing its impressive track record of annual dividend boosts. Based on its historical patterns, there's an expectation that the company will follow suit and announce a dividend increase this coming February. It currently offers a quarterly dividend of $1.50 per share and has a dividend yield of 5.55%, as recorded on January 5.
As of the end of Q3 2023, 54 hedge funds in Insider Monkey's database owned stakes in 3M Company (NYSE:MMM), up from 49 in the preceding quarter. The total value of these stakes is over $818.6 million. Among these funds, Ken Griffin's Citadel Investment Group was the company's largest stakeholder in Q3.