Investing

5 Big DJIA Dividend Hikes Expected Before 2014 Ends

The $35.25 share price for AT&T generates a yield today of 5.2%, by far the highest yield of the DJIA components. How high can AT&T be expected to raise the payout on such small earnings per share growth? After all, S&P recently revised its outlook to negative from stable after AT&T’s fresh revenue growth warning. AT&T’s stock has a consensus analyst price target of $35.67 and a 52-week trading range of $31.74 to $37.48. Analysts expect AT&T to have $2.57 in earnings per share for the 2014 full year and $2.60 in earnings per share for the 2015 full year.

Disney

Walt Disney Co. (NYSE: DIS) is largely expected to continue its dividend hike cycle. The dividend hike announcement for 2013 came on December 4 and was up 15% to $0.86 per share for its annual dividend payout. Disney remains the only DJIA component that makes only one dividend payment per year. The year-ago dividend was payable on January 16, 2014, to holders of record at the close of business on December 16, 2013. Our view is that Disney’s low 0.93% or so yield will be raised to at least a 1% yield again — perhaps being as much as to $1.00 per share, but most likely to $0.95 per share.

UPDATE: Disney delivered a much higher dividend hike than we expected!

Disney’s stock has a consensus analyst price target of $95.44 and a 52-week trading range of $68.80 to $92.96. The Mouse House expects earnings per share of $4.67 in the 2015 fiscal year and $5.41 in the 2016 fiscal year. The latest buzz on Star Wars demand should show just how much Disney can keep expanding.

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3M

3M Co. (NYSE: MMM) is set to have its 2015 annual outlook meeting on December 16, 2014. This was the platform for its dividend payout hike announcement last year, but it may seem like a dividend hike that is very rapid, considering that 3M’s last quarterly dividend of $0.855 per share was just announced on November 11. The big deal in 2013 is that 3M’s dividend announcement was a 35% hike. We simply do not expect a repeat of the same for this next year — particularly as 3M announced a $12 billion stock buyback program just this last February. Our outlook is for 3M’s dividend hike to move up to $0.90 to $0.95 from $0.855 per share now.

UPDATE: 3M also delivered a much higher dividend hike than we expected!

3M’s current share price of $158 or so compares to a consensus analyst price target of $155.29 and a 52-week trading range of $123.61 to $160.86. The highest analyst price target for 3M is up at $167. The company has a dividend yield rate of 2.1%. 3M expects earnings per share of $7.48 in the 2014 full year and $8.20 in the 2015 full year. 3M was recently viewed as having the best of the conglomerate earnings stories this earnings season.

Boeing

December has been when Boeing Co. (NYSE: BA) hiked its dividend for the past three years. It has a December 3 presentation at a Credit Suisse conference. While we do not have any formal dates for this, Wells Fargo suggested that the dividend hike announcement should come after the close on December 15. Boeing’s dividend hike was a massive 50% a year ago, and we have close to zero expectations of a similar hike this year. The current payout of $0.73 per quarter likely will be bumped to $0.80 per share, or perhaps as much as $0.85 per share. That would take a nearly 2.2% yield up to around 2.4% to 2.55%, based on a $133 share price.

UPDATE: And Boeing offered a much higher dividend hike than we were looking for as well!

Boeing’s consensus analyst price target is $150.00, and the 52-week trading range is $116.32 to $144.57. The highest analyst price target is all the way up at $175. Analysts expect Boeing earnings per share of $8.36 in the 2014 full year and $8.61 in the 2015 full year. Also, keep in mind that Boeing’s earnings views for the years ahead are supported by almost $500 billion in backlog now.

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