6 More Expected DJIA Dividend Hikes Before 2014 Ends
General Electric Co. (NYSE: GE) is a dividend hike we are almost certain is on the way again, but perhaps not until December. There is just one problem after this year — GE is about to be a different company, without appliances and without the consumer finance dominance. We will have to judge the 2015 plans when that time arrives, but GE is likely a shoo-in for a higher dividend later in 2013. We predicted that GE would raise its dividend to $0.21 from $0.19 last year, but GE hiked it even more to $0.22. The issue is that this is now at 52% of expected 2014 operating earnings and 48% of expected 2015 earnings. We have to think conservatively again, with a reminder that GE’s dividend yield is massively higher than peers at close to 3.5%, and it is still likely a few years out before GE is back to its $0.31 per quarter dividend from before the recession.
> 24/7 Wall St. view: GE likely will hike its dividend to $0.235 or $0.24 per quarter.
Nike Inc. (NYSE: NKE) is among the new DJIA components and it keeps enthralling the public with its brand hits around the globe. Nike has seen a history of recent dividend hikes, with its most recent hike rising 14% to a payout of $0.24 per quarter. Much of Nike’s capital may be locked up overseas, but its 1.2% dividend yield just doesn’t exactly create any wow-factor for new investors. Shares are also within 2% of all-time highs and Nike is worth just over $70 billion. The problem is that it trades at an expensive 24 times expected earnings, so it simply cannot get crazy on its dividend hikes.
> 24/7 Wall St. view: Nike is likely to raise its payout from $0.24 per quarter to $0.27 or $0.28.
Goldman Sachs Group Inc. (NYSE: GS) raised its dividend last October along with earnings, and that is likely to be the case again. The company is among the new DJIA components, and the $2.20 payout per year right now is a paltry 13% of expected 2014 operating earnings per share. Goldman Sachs also has an unimpressive dividend yield of 1.3%, which is rather measly for one of the best banks and brokers in the world. Goldman Sachs could literally double its dividend, but of course regulators and public outcry may keep the firm from living up to its payout potential.
> 24/7 Wall St. view: Goldman Sachs may lift the payout to $0.60 or $0.65 per share. Again, the company can afford to pay drastically higher — but will it?
Visa Inc. (NYSE: V) is not a loser in Apple’s pay initiative after all, and its dividend still has much catching up to do. The 2013 hike was by 21%, and it marked the fifth such dividend hike since Visa came public. That being said, Visa’s dividend still offers an embarrassing yield of less than 1%. The current $1.60 payout per year is not even 18% of expected operating earnings in 2014 and is barely 15% of expected 2015 operating earnings. Much of Visa’s cash may be overseas, but this is something that needs to be raised handily. Visa is not just one of the new Dow components — Visa is the Dow’s largest single component by weighting at more than 8.1%, making a 1% yield all that much more embarrassing.
> 24/7 Wall St. view: Visa could raise its dividend by 100% and not blink an eye on paper, but the hike we are willing to forecast is from $0.40 per quarter to $0.48 or $0.50.