Six More Big Dividend Hike Announcements Expected Before 2014

Print Email

The dividend hike brigade keeps on marching. Microsoft Corp. (NASDAQ: MSFT) jumped in with a dividend hike a tad sooner than we were expecting, given that it is searching for a new CEO. We expect more dividend hikes coming in the next few weeks and before the end of 2013.

24/7 Wall St. has analyzed, criticized and predicted many dividend flows for years now, and we see several more dividend hikes likely to be announced before the end of the year. Not all these payments will have to be paid out in this calendar year, but the announcements should come before year-end. Some raised dividend announcements may come as soon as the next few weeks.

AT&T Inc. (NYSE: T) last hiked its dividend with an announcement last November. AT&T has raised dividends for so long that it is one of the dividend aristocrats. It is also the king of dividends among Dow Jones Industrial Average (DJIA) stocks, having the highest yield in that index of a whopping 5.2%. AT&T also would still have to rally more than 12% before hitting a 52-week high, and we think that the bulk of its major acquisitions have been made.

AT&T pays out close to 72% of normalized per share income now, so when you add in that it has the highest DJIA yield already, we would only expect the hike to be from $0.45 up to $0.46 per share per quarter. As a reminder, AT&T outyields Verizon Communications Inc. (NYSE: T) by almost 1%. We expect this hike, but we just cannot expect too much of one when it already dominates all peers in payouts.

General Electric Co (NYSE: GE) is all but a shoe-in for a higher dividend hike. We would expect this announcement most likely in December, but Jeff Immelt is now in the midst of separating off parts of GE Capital, and this finally has started paying GE’s parent company dividends again.

We predicted this GE dividend hike earlier in the year and we stick by the amount. With earnings growth expected to be just under 10%, we are looking for the GE dividend announcement that the raise will be to $0.21 per share from $0.19 per quarter. This would be 46% or so of expected and normalized earnings per share for GE in 2014.