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Tuesday, March 5, 2024

Chevron, Kimberly-Clark Among 14 Companies To Announce Dividend Increases In January

Chevron, Kimberly-Clark Among 14 Companies To Announce Dividend Increases In January

As it prepares to finalize the acquisition of Hess, Chevron will announce its 37th year of dividend growth in January.

Brandon Bell

This is the latest in my series of articles where I provide predictions of annual dividend increases

Company# YrsIndustryPrediction (%)New Annual Rate
Archer-Daniels Midland Company (ADM)48Consumer Defensive – Farm Products8.9% – 11.1%$1.96 – $2.00
The agricultural company saw a drop in revenue across all its business units, but the most significant fall was in its Nutrition segment, as demand slowed for plant-based protein foods. While still significantly profitable, the revenue drop caused ADM’s EPS to fall 9% in the first 3 quarters of 2023. The company won’t repeat last year’s 12.5% boost, but the company’s 30% payout ratio means ADM’s next boost might be in the double-digits. Predicted Forward Yield: 2.71 – 2.77%
Air Products & Chemicals, Inc. (APD)41Materials – Specialty Chemicals8.0% – 10.3%$7.56 – $7.72
Despite a drop in sales, the chemical company cut administrative expenses in fiscal 2023, resulting in 13% adjusted EPS growth for the full year. The company continues to expand, with multiple projects to develop green hydrogen plants around the world. These plants use renewable energy to create hydrogen from water. With another 13% adjusted EPS growth expected in 2024, the company should announce a boost similar to last year’s 8% increase, with a chance that investors could see a 10% increase. Predicted Forward Yield: 2.76 – 2.82%
Apogee Enterprises, Inc. (APOG)12Industrials – Building Products & Equipment8.3% – 10.4%$1.04 – $1.10
This producer of architectural products, and high-performance glass and acrylic products used in buildings, has a very consistent annual dividend growth rate around 9%. Although adjusted EPS are expected to fall 6% in fiscal 2024, the company’s rebound in 2023 and payout ratio below 25% means investors can look forward to another boost of at least 9% and possibly an increase in the low teens. Predicted Forward Yield: 1.95 – 2.06%
Booz Allen Hamilton Holding Corporation (BAH)12Industrials – Consulting Services7.4% – 10.6%$2.02 – $2.08
Although it sports a 5-year compounded growth rate of 20%, the consulting company’s dividend growth rate is bound to slow – if only based on the increasing difficulty of growing as a company gets larger. Last year’s 9% dividend increase – while still a nice boost – was an example of this. With adjusted EPS growth of 8.3% last year and another 10% expected this year, investors should expect another year of 8 – 9% dividend growth. Predicted Forward Yield: 1.58 – 1.63%
BlackRock, Inc. (BLK)14Financial – Asset Management2.0% – 5.0%$20.40 – $21.00
At one point, the investment manager had more than $10 trillion under management. When the market fell in 2022, assets under management and earnings fell also, with adjusted earnings down 13%. While the market is up in 2023, adjusted earnings haven’t fully recovered, with growth of less than 7% over the first 3 quarters of the year. BlackRock’s dividend increase last year was 2.5% – far below the company’s historical 10%+ growth. With the continued difficulties in the market, investors can expect another increase like last year’s. Predicted Forward Yield: 2.51 – 2.59%
Church & Dwight Co., Inc. (CHD)27Consumer Defensive – Household & Personal Products3.7% – 5.5%$1.13 – $1.15
Church & Dwight is the manufacturer of baking soda and the owner of the Arm & Hammer brand of products. The company is a slow grower – it has grown its annual dividend by 4 cents in each of the last 2 years. Church & Dwight is growing through acquisitions and also has the Oxiclean, Xtra Liquid Detergent, and Waterpik brands in its stable. After a slight drop in 2022, the company expects to grow adjusted EPS by 6% in 2023. While this return to growth is welcome by investors, the company is likely to announce another year of 4-cent growth. Predicted Forward Yield: 1.20 – 1.22%
Cincinnati Financial Corporation (CINF)63Financial – Insurance6.0% – 8.0%$3.18 – $3.24
After large insurance payments in 2022 due to Winter Storm Elliott, Cincinnati Financial’s combined ratio – a measure of profitability for insurance companies – fell a few percentage points, meaning that profitability improved. While the improving profitability in 2023 doesn’t fully offset the drop in 2022, investors will see a 64th year of dividend growth from Cincinnati Financial. Predicted Forward Yield: 3.07 – 3.13%
California Water Service Group (CWT)56Utilities – Regulated Water0 – 3.8%$1.04 – $1.08
The water and wastewater utility has been expecting a decision from the California Public Utility Commission on a new rate structure but with the decision delayed, earnings have fallen more than 70% so far in 2023. This massive drop means minimal dividend growth, if at all, this year from California Water Service Group. Predicted Forward Yield: 2.01 – 2.08%
Enterprise Bancorp, Inc. (EBTC)29Financial – Regional Banks6.5% – 8.7%$0.98 – $1.00
Earnings were flat in 2022 and continue to be flat so far this year at the Massachusetts-based regional bank. Despite last year’s 12% dividend boost, investors should expect something smaller this year – likely in line with the company’s decade-long average growth rate of 7%. Predicted Forward Yield: 3.04 – 3.10%
Consolidated Edison, Inc. (ED)49Utilities – Regulated Electric1.9% – 3.7%$3.30 – $3.36
After 8% adjusted EPS growth in 2022 and expectations of another 10% in 2023, investors could be forgiven for expecting a large dividend increase this year. However, the New York-based electric utility has a very consistent history of 2 – 3% annual dividend growth. With the company sporting a high debt level and increasing the number of outstanding shares, the slow dividend growth will continue. Predicted Forward Yield: 3.63 – 3.69%
Fastenal Company (FAST)24Industrials – Industrial Distribution8.6% – 14.3%$1.52 – $1.60
The industrial supplier and distributor sports a good dividend compounded growth rate of 14% over the last decade. In addition, Fastenal announced a special dividend of 38 cents in mid-November. With 18% adjusted EPS growth in 2022 and another 7% growth so far in 2023, it looks like the company’s dividend growth rate should continue. Predicted Forward Yield: 2.35 – 2.47%
Franklin Electric Co., Inc. (FELE)31Industrials – Specialty Industrial Machinery6.7% – 8.9%$0.96 – $0.98
Mid-cap company Franklin Electric manufactures systems that focus on the movement and management of water, fuel and electricity. The company is looking at minimal EPS growth for 2023 due to drops in sales in the Distribution and Fueling Systems segments, more than offsetting an increase in the Water Systems segment. This comes after 22% EPS growth in 2022. Although the company sports a decade-long dividend growth rate of 11%, the slower growth this year will put the brakes on the increase this year. Investors can expect an increase in the high single digit percentages. Predicted Forward Yield: 0.99 – 1.01%

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