Investing

7 Stocks That Are Ready for Dividend Hikes in 2024

Lee Jackson

Published: December 27, 2023 8:10 am

Last Updated: December 29, 2023 7:24 am

With December here, many investors are looking toward the Christmas holidays and the end of the year, and one thing is for sure: The stock market went through some of the biggest combined net selling from August to October across global equities ever. Then, it staged one of the furious rallies in stock market history from October until now.

The significant drop in Treasury yields on hopes that the Federal Reserve will end the series of hikes may be premature, so it makes sense for investors to look to stocks that are not fully valued and pay dependable and, in some cases, significant dividends.

Based on history, seven top companies looked poised to raise their dividends in 2024, and all are strong Buy rated on Wall Street.

AT&T

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The legacy telecommunications company has been going through a lengthy restructuring, lowering the dividend, which still checks in at 6.68%. AT&T Inc. (NYSE: T) provides worldwide telecommunications, media, and technology services.

Its Communications segment offers wireless voice and data communications services.

AT&T  sells:

• Handsets
• Wireless data cards
• wireless computing devices
• Carrying cases
• Hands-free machines are available through its company-owned stores, agents, and third-party retail stores

AT&T provides:

• Data
• Voice
• Security
• Cloud solutions
• Outsourcing
• Managed and professional services
• Customer premises equipment for multinational corporations, small and mid-sized businesses, and governmental and wholesale customers

In addition, this segment offers broadband fiber and legacy telephony voice communication services to residential customers.

It markets its communications services and products under:

• AT&T
• Cricket
• AT&T PREPAID
• AT&T Fiber brands

The company’s Latin America segment provides wireless services in Mexico and video services in Latin America. This segment markets its services and products under the AT&T and Unefon brands.

Comerica

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Based in Dallas, this fast-growing banking center giant pays a solid 5.10% dividend. Comerica Inc. (NYSE: CMA) provides various financial products and services.

The company operates through

• Commercial banking
• Retail banking,
• Wealth management
• Finance

The Commercial Bank segment offers various products and services, including:

• Commercial loans
• Lines of credit
• Deposits
• Cash management
• Capital market products
• International trade finance
• Letters of credit
• Foreign exchange management services
• Loan syndication services
• Payment and card services for small and middle-market businesses, multinational corporations, and governmental entities

The Retail Bank segment provides:

• Personal financial services
• Consumer lending
• Consumer deposit gathering
• Mortgage loan origination
• Consumer products that include deposit accounts, installment loans, credit cards, student loans, home equity lines of credit
• Residential mortgage loans, as well as commercial products and services to micro-businesses

The Wealth Management segment offers products and services comprising:

• Fiduciary
• Private banking
• Retirement
• Investment management and advisory
• Investment banking
• Brokerage services
• Annuity and life, disability, and long-term care insurance products.

The Finance segment engages in the securities portfolio and asset and liability management activities.

Comerica operates in:

• Texas
• California
• Michigan
• Arizona
• Florida
• Canada
• Mexico

Dow

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This company was spun out from Dupont in 2019 and offers investors growth and income potential with a hefty 5.10% dividend. Dow Inc. (NYSE: DOW) is a leading materials science company formed due to the merger of Dow and DuPont in 2017 and the subsequent spin in 2019.

Dow is organized into three principal divisions:

• Performance Materials and coatings
• Industrial Intermediates and infrastructure
• Packaging and specialty Plastics

The Company’s segments include:

• Agricultural Sciences, which provides crop protection
• Seed/plant biotechnology products and technologies
• Urban pest management solutions
• Healthy oils.

Consumer Solutions consists of:

• Consumer Care,
• Dow Automotive Systems,
• Dow Electronic Materials and
• Consumer Solutions-Silicones businesses

Infrastructure Solutions consists of

• Dow Building & Construction
• Dow Coating Materials
• Energy & Water Solutions
• Performance Monomers
• Infrastructure Solutions-Silicones businesses
• Performance Materials and chemicals, which consist of Chlor-Alkali and Vinyl
• Industrial Solutions and Polyurethanes businesses
• Performance Plastics, which consists of Dow Elastomers
• Dow Electrical and Telecommunications
• Dow Packaging and Specialty Plastics
• Energy and Hydrocarbons businesses

International Business Machines

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This blue-chip giant still offers investors an excellent entry point and a rich 4.11% dividend. International Business Machines (NYSE: IBM) is a leading provider of enterprise solutions, offering a broad portfolio of IT hardware, business and IT services, and a full suite of software solutions.

The company integrates its hardware products with its software and services offerings to provide high-value solutions.

IBM comprises five major segments:

•  Cognitive Solutions,
•  Global Business Services,
• Technology Services & Cloud Platforms
•  Systems
• Global Financing.

The company posted an excellent third quarter, as the cloud proved prominent in the earnings reports, as did Red Hat, the software giant the firm bought in 2019.

Red Hat’s open hybrid cloud technologies are now paired with the unmatched scale and depth of IBM’s innovation, industry expertise, and sales leadership in more than 175 countries.

Kinder Morgan

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This is one of the top energy stocks and remains a favorite across Wall Street, paying a dependable 6.41% dividend. Kinder Morgan, Inc. (NYSE: KMI) is an energy infrastructure company in North America.

The company operates through:

• Natural Gas,
• Products,
• Terminals
• CO2 segments.

The Natural Gas Pipelines segment owns and operates

• Interstate and intrastate natural gas pipelines
• Underground storage systems
• Natural gas gathering systems
• Natural gas processing and treating facilities
• Natural gas liquids fractionation facilities
• Transportation systems
• Liquefied natural gas liquefaction and storage facilities

The Products Pipelines segment owns and operates refined petroleum products, crude oil, condensate pipelines, associated product terminals, and petroleum OKEpipeline transmit facilities.

The Terminals segment owns and operates liquid and bulk terminals that store and handle various commodities, including gasoline, diesel fuel, chemicals, ethanol, metals, and petroleum coke and owns tankers.

The CO2 segment produces, transports, and markets CO2 to recover and produce crude oil from mature oil fields and owns interests in/or operates oil fields and gasoline processing plants, as well as a natural oil pipeline system in West Texas.

The company also holds and runs approximately 83,000 miles of pipelines and 144 terminals.

Leggett & Platt

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While somewhat off-the-radar, this stock has almost been cut in half over the last year, offering massive upside potential and a fat 7.90% dividend. Leggett & Platt Incorporated (NYSE: LEG) designs, manufactures, and markets engineered components and products worldwide.

It operates through three segments:

• Bedding & Specialized Products
• Furniture
• Flooring & Textile Products.

The company offers

• Steel rods
• Drawn wires
• Foam chemicals and additives
• Innerspring,
• Specialty foams
• Private label finished mattresses
• Mattress foundations
• Wire forms for mattress foundations
• Adjustable beds
• Industrial sewing and quilting machines
• Mattress packaging and glue drying equipment
• Machines to produce innerspring for industrial users of steel rods and wires, manufacturers of finished bedding, big box and e-commerce retailers, bedding brands and mattress retailers, department stores, and home improvement centers.

Leggett & Platt also provides

• Mechanical and pneumatic lumbar support and massage systems for automotive seating
• Seat suspension systems
• Motor actuators and cables
• Titanium, nickel
• Stainless steel tubing; formed tubes, tube assemblies
• Flexible joint components for fluid conveyance systems
• Engineered hydraulic cylinders to automobile OEMs and Tier 1 suppliers, aerospace OEMs and suppliers, and mobile equipment OEMs

Philip Morris International

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This company has continued to grow its global market share and pays a fat 5.46% divided. Philip Morris International Inc. (NYSE: PM) is one of the largest international cigarette producers, with a share of 28% of the global cigarette/heated tobacco market.

Key combustible brands include:

• Marlboro
• Parliament
• L&M

The company is commercializing IQOS, a heat-not-burn product, in over 40 markets, which could drive earnings in the future. Most on Wall Street believe Philip Morris International offers superior underlying growth prospects, both near-term and long-term.

The share price has been weak of late as investors have questioned the growth potential of its reduced-risk products. 100% of the sales are outside of the United States.