Investors love dividends and stock buybacks. After all, these are the two most common forms of returning capital to shareholders under corporate governance. With 2014 coming to an end, and with investors now looking to 2015, there have been several dividend hikes and stock buybacks in November and December that simply have been too big to ignore.
24/7 Wall St. has identified 10 companies that either increased their dividends by more than expected or announced share buybacks that were just too big to ignore.
As investors stomach the thought of a rising interest rate environment in 2015, a stock market effectively at all-time highs and a slow international growth picture into deflationary headwinds, it seems given that investors are more likely to be very selective in which stocks they want to own in the year ahead.
AES Corp. (NYSE: AES) may not have been a great dividend rate at 1.5% or so, but the electric power generator announced on December 15 that it is doubling the dividend from $0.05 to $0.10 per share per quarter. This will get it closer to a 3% yield. AES said that it will allocate significantly more of its cash toward the dividend. At just under $13.40 on Friday, AES shares have a 52-week range of $12.38 to $15.65 — so its stock is nowhere close to high. The consensus analyst price target is $15.40.
Boeing Co. (NYSE: BA) managed to handily beat our own dividend hike expectations. The aerospace and defense giant announced that it would increase its quarterly dividend by 25% to $0.91 per share. We had predicted that Boeing’s current payout of $0.73 likely would be raised to $0.80 per share, or as much as $0.85 on the highest upside expected. At the same time, Boeing authorized a $12 billion share repurchase program. Keep in mind that Boeing has been buying back stock already and that the prior dividend hike was by 50% — representing a combined increase of 88% over the past two years. Could Boeing be the best Dow stock of 2015?
Intel Corp. (NASDAQ: INTC) gave everyone a Thanksgiving surprise in late November at its annual investor meeting. The semiconductor and processor giant raised its dividend to $0.96 from $0.90 per share on an annualized basis. What stands out the most here is that Intel’s most recent dividend hike was paid out in mid-2012, when the quarterly payout went to $0.225 per share from $0.21 per share. Quite literally, it was less than 12 months ago that some analysts said they feared that Intel might not be able to raise its dividend for years. It turns out that the death of the PC and the rise of the mobile Web may not have left Intel in the dust. Now you know why Intel was the best Dow stock performer of 2014 and why investors are only now just starting to warm up to it for 2015 and beyond.