If you’re considering adding dividend stocks to your portfolio, you should prioritize those that are increasing their payouts. As investors and consumers know all too well, inflation has the ability to reduce purchasing power. For dividend stocks, this means that the dividend you receive today will be worth less in the future – unless the company increases it.
Dividend increases won’t always fully offset the effects of inflation, but by investing in companies that strive to increase their payouts consistently, you can at least increase the chances that your dividend income will increase over time. ‘future.
Three stocks that have increased their dividend payments in recent years are Comcast (NASDAQ:CMCSA), Kimberly Clark (NYSE:KMB)And Chevron (NYSE: CVX). And they could all announce another round of raises later this month.
Telecommunications and media giant Comcast currently offers investors a dividend that yields 2.6%. This is a higher payout than you would get with the average stock on the market. S&P500where the yield is slightly less than 1.5%. In recent years, the company has also increased its payouts. And recent history suggests another dividend hike could happen soon.
Last January, the company announced a 7% increase in its quarterly dividend payments. January is typically when Comcast has declared dividend increases in the past. And with the company’s finances in good health, it seems likely that another raise could be announced soon.
In Comcast’s third-quarter results, ended September 30, the company’s revenue increased 0.9% to $30.1 billion, and its free cash flow increased 19% to just over $4 billion. Comcast’s modest payout ratio, which sits at about 32% of earnings, suggests there could be room for another generous rate hike this month.
2. Kimberly Clark
Kimberly-Clark sells many common household products that consumers use every day, including tissue paper, diapers and feminine care products. It owns major brands such as Cottonelle, Huggies and Kleenex.
While Kimberly-Clark isn’t a fast-growing company to invest in, it can be a reliable stock to hold on to for the long term. When it last reported results for the period ending September 30, net sales were $5.1 billion and growing at a modest 2% year-over-year. But with stronger margins, the company’s operating profits rose 18%.
Kimberly-Clark is a King of dividends and has increased its dividend payments for 51 consecutive years. Even though rate increases can be modest (the last increase was just $0.02), they incentivize investors to buy and hold for the long term. Today, the consumer goods stock yields 3.9%.
The consumer goods giant typically declares dividend increases in January, and given the company’s continued strong performance in 2023, it would be a shock if it didn’t announce another dividend increase later this month -this.
Oil prices have fallen, and that’s not good news for a top oil and gas stock like Chevron. But at over $70 a barrel, oil prices are relatively high and should be high enough for the oil and gas producer to continue posting strong profits. Even if $100 a barrel of oil disappears in the near future, Chevron can still be a great option for investors. income investors.
Profits for the third quarter (which ended September 30) were down sharply for Chevron due to lower commodity prices, as operating revenue of $51.9 billion fell by 18%. But the positive side is that even amid the worst results, the company’s diluted earnings per share were $3.48 for the quarter – that’s still more than double the $1.51 that Chevron pays in dividends each quarter.
The stock’s 4% dividend yield still looks safe. It would be surprising if the company did not increase its payments in January. Chevron last announced it would increase its dividend by 6% on January 25, 2023. This is the company’s 36th consecutive year of annual dividend increases. And it is very likely that this streak will extend to 37 years in 2024.
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3 Dividend Stocks That Could Increase Their Payouts in January was originally published by The Motley Fool