Investing

6 More Expected DJIA Dividend Hikes Before 2014 Ends

Jon C. Ogg

Investors have many things to consider in the latter part of 2014 and as 2015 nears. One such consideration is the trend of dividend hikes. On the heels of fresh dividend hikes from Microsoft, Altria and others, 24/7 Wall St. wants to telegraph more Dow Jones Industrial Average (DJIA) stocks that are almost certain to raise their dividends before the end of 2014.

Of the 30 Dow components, 24/7 Wall St. has identified six stocks that are almost shoo-ins for dividend hikes. We would note that we are equally certain that several more will announce dividend hikes soon. The problem is that we have yet to quantify just how much those dividends will be raised — so stay tuned for more dividend hike predictions.

We have included some color on each company and given an expected time frame for when these hikes will occur. We have even shown an expected amount by which each hike will be made. These are the six DJIA dividend hikes we see definitively before the end of 2014.

United Technologies Corp. (NYSE: UTX) should be raising its dividend in October, by our estimate. The conglomerate is expected to bring in close to 10% earnings growth in 2014 and in 2015, and its dividend growth was 10% in 2013, after dividend growth of over 11% in 2012. A 10% dividend hike would go up to $0.65 per quarter per share — or about 38% of adjusted earnings in 2014, or just under 35% of adjusted earnings expected in 2015. The current dividend yield is roughly 2.2%, but United Tech may have GE-envy for a Dow conglomerate with a dividend that need to be raised. The company raised its dividend last October, and it is going on what likely will be 20 years of dividend hikes.

> 24/7 Wall St. view: United Tech likely will take its $0.59 dividend up to $0.64 or $0.65 per quarter.

McDonald’s Corp. (NYSE: MCD) raised its dividend in the middle of September last year, and it can be expected to continue despite its ongoing labor woes and negative sales trends. Keep in mind that McDonald’s has raised its dividend each and every year since paying its first dividend in 1976. What we would point out is that McDonald’s has slowed its dividend growth (5% in 2013) and its current woes likely will keep the Golden Arches from getting too aggressive in higher payouts when there is controversy over higher wages every week here. If you think it is too ambitious to want a dividend hike at this time, just take its views from May to heart.

> 24/7 Wall St. view: McDonald’s will raise its $0.81 quarterly payout to $0.85, taking the yield up to almost 3.65%.

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