This past week was a rough one for the markets. Both the Dow Jones Industrial Average (DJIA) and the S&P 500 hit new all-time highs, only to sell off handily from the peak before recovering late on Friday. It is now called a stock picker’s market rather than a raging bull market, and the belief is that investors will continue flocking toward companies that are increasing dividends and those paying safer big dividends.
24/7 Wall St. tracked many dividend hikes this past week, but seven of them really stood out. Below we show the new payout versus the old payout, and on a quarterly basis per common share. We also show what the new payout will generate as far as a dividend yield.
These were the seven dividend hikes from the past week that investors should know about.
American Express Co. (NYSE: AXP) raised its dividend early this past week. By our take, AmEx needs to raise its payout by even more to get back on par. This is a DJIA component, and it is one of the top holdings of Warren Buffett. Its dividend hike is going to $0.26 per share from $0.23 per share, for a yield of only 1.2% after the hike occurs. That is among the worst yields of the Dow.
Clorox Co. (NYSE: CLX) raised its payout by 4% to $0.74 per share per quarter. This keeps in line with the theme that consumer products companies will continue raising their dividends. Unfortunately, it is getting harder and harder for these giants to keep boosting their payouts. This 4% boost gives Clorox an impressive new yield of 3.4%.
Gentex Corp. (NASDAQ: GNTX) may sound like a biotech outfit, but it makes the dimming rear-view mirrors. The company is also supposed to be a winner from the forced growth of rear camera displays as well. A 14% dividend increase to $0.16 per share per quarter from $0.14 is a commitment that it sees continued growth. Gentex’s new dividend will be more than 2.2%.
Hewlett-Packard Co. (NYSE: HPQ) remains in a long-run turnaround plan under the guidance of CEO Meg Whitman. The company announced a regular dividend of $0.16 per share on Wednesday, up from a prior payout of $0.145 per share. Be advised that this 10% dividend hike had originally been announced in March, but it was subject to the next board meeting approval. With absolutely no real growth expected this year or next from Hewlett-Packard, and with so many people having been let go, some investors may have doubted if this dividend hike would come. The new yield is almost 2%.
Macy’s Inc. (NYSE: M) announced that it would hike its payout by 25% to $0.3125 per share per quarter. With shares closing at $58.07 and its stock not getting much higher than $60 of late, Macy’s is doing what it can to keep investor interest alive. The company’s new dividend yield will be almost 2.2%, relatively high for retail stocks.
National Oilwell Varco Inc. (NYSE: NOV) had a massive dividend hike. The oil and gas infrastructure and platform building giant raised its dividend from $0.26 to $0.46. In raw dollars, this was even more impressive than when the company doubled the dividend to $0.26 from $0.13 a year earlier. This new dividend yield will jump from about 1.3% to almost 2.3%. Our take is that the expected double-digit earnings growth in 2014 and 2015 will allow National Oilwell Varco to raise its dividend again.
Southwest Airlines Co. (NYSE: LUV) decided to keep returning capital to its shareholders, with a hike of 50%. The payout jumped to $0.06 per share from $0.04 per share, giving it north of a 1% yield now. Airlines have not been the biggest dividend payers in the market, but the consolidation via mergers and the ability to charge more and more fees (and higher ticket prices) is changing that. Southwest also announced a new buyback plan.