JPMorgan Just Raised Its Dividend 10%. These 4 Stocks Also Can Afford to Pay Much Bigger Dividends

The best dividend raises come from companies that pay out a small piece of what they earn. JPMorgan Chase (NYSE:JPM | JPM Price Prediction) just showed how that works: it lifted its quarterly dividend from $1.50 to $1.65, a 10% increase, and the new annual rate still matches only 28.3% of trailing earnings. The five companies below all fit that pattern. Each has strong earnings and a payout ratio low enough to fund many more raises. A long streak of past increases supports the case for some of them, but the reason they’re here is how much room each has to keep advancing.

Visa: A 23% Payout Ratio Leaves Years of Raises in the Tank

Visa (NYSE:V) yields only about 0.72% on its $2.68 annualized dividend at a share price of $370.97. That’s a small yield, but the dividend has a lot of room to grow. The payout uses about 22.8% of trailing diluted EPS of $11.75, and Visa’s trailing operating margin is 66.1%.

Dividend safety: Cash returns run well ahead of the dividend. In fiscal Q3, the CFO said, “we bought back $4.9 billion in stock and distributed $1.3 billion in dividends to our shareholders.” Visa ended June with $28.4 billion left in its buyback authorization. The quarterly dividend has climbed in steps from $0.21 to $0.67, and the increase from $0.59 worked out to 13.6%.

Bull case: Fiscal Q3 net revenue rose 14.4% to $11.63 billion, and non-GAAP EPS of $3.32 beat the $3.23 estimate. Value-added services revenue grew 34% in constant dollars. Management expects full-year EPS growth in the low end of mid-teens. With earnings growing that fast and the payout ratio this low, double-digit dividend increases look sustainable for years.

Risk: The shares trade at 31 times trailing earnings, so the yield will likely stay low. The interchange MDL litigation and $563 million in severance costs are still open issues.

JPMorgan Chase: A Fresh 10% Raise With Plenty of Capital Behind It

At $331.49, JPMorgan’s new $6.60 annualized dividend yields about 1.99%. That rate is 28.3% of trailing EPS of $23.34. One note: trailing EPS includes a one-time gain of $4.6 billion from the Visa Class C exchange, so the payout ratio on core earnings is somewhat higher. Q2 adjusted EPS was $6.14, up 13% from a year earlier, with return on tangible common equity of 23%.

Dividend safety: Banks are judged on capital strength. JPMorgan’s CET1 ratio is 14.3%, supported by $291 billion of CET1 capital. A new $50 billion buyback program took effect July 1, 2026, after repurchases of $8.3 billion in Q1 and $6.7 billion in Q2. The quarterly dividend has risen from $1.05 in January 2024 to $1.65.

Bull case: Investment banking fees rose 30% to $3.30 billion, the highest since 2021. Equity Markets revenue jumped 86%. At 14 times trailing earnings, the stock is cheap compared with how much capital the bank generates.

Risk: Credit is getting worse at the margin. The card net charge-off rate is 3.33%, and the allowance for credit losses rose 12% to $31.4 billion. Analysts are split, with 11 holds against 13 buy or strong-buy ratings.

Lowe’s: Free Cash Flow Covers the Dividend Nearly Three Times

Lowe’s (NYSE:LOW) trades at $184.13, well below its 52-week high of $289.87, so its $5 annualized dividend yields about 2.72%. The dividend is 41.3% of trailing EPS of $11.74, and the quarterly payout rose this year from $1.20 to $1.25.

Dividend safety: In the fiscal year ended January 2026, Lowe’s generated $7.65 billion in free cash flow and paid $2.64 billion in dividends. That works out to a free cash flow payout of 34.5%. In Q2 alone, it produced $3.1 billion of free cash flow. Shareholders’ equity is negative (-$7.4 billion) because of years of buybacks, which is normal for Lowe’s. The number to track is adjusted debt to EBITDA, now 3.0 times, with a target of 2.75 times by mid-2027. Management mentions the company’s “status as a dividend aristocrat“.

Bull case: Q2 adjusted EPS of $4.40 beat the $4.22 estimate. Online sales grew 15.7%, and comps were positive for a fifth consecutive quarter. Management points to $20 billion to $50 billion of deferred home-improvement demand. Once leverage hits its target, cash freed up for buybacks can also go toward larger dividend increases.

Risk: Management expects Q3 adjusted EPS to come in about 7% below last year’s, and full-year guidance was narrowed to the low end at roughly $12.25. Light DIY spending and tariffs could hold back the size of future raises.

Cisco Systems: AI Orders Are Lifting Earnings Faster Than the Dividend

Cisco Systems (NASDAQ:CSCO) yields about 1.45% on its $1.68 annualized dividend at $116.22. On GAAP earnings, the payout ratio is 50.2%. Measured against the low end of fiscal 2027 non-GAAP EPS guidance of $5.05 to $5.11, it falls to 33.3%.

Dividend safety: Fiscal 2026 free cash flow came to $12.77 billion, against $6.55 billion in dividends, a 51.3% free cash flow payout. Cisco ended the year with $15.9 billion in cash and investments and $8.1 billion left on its buyback. The CFO said, “We increased our dividend for the 15th consecutive year in FY26.”

Bull case: AI infrastructure orders hits $9.3 billion in fiscal 2026. Management expects about $7.5 billion of AI infrastructure revenue in fiscal 2027, along with an operating margin of about 35%. Cisco’s raises have been about a cent a year, from $0.35 in 2020 to $0.42 today. With earnings growing much faster than that, there is room for larger increases.

Risk: Non-GAAP gross margin fell to 66.3% from 68.4% as lower-margin AI hardware became a bigger share of sales. Fiscal 2026 dividends and buybacks together used up “99% of free cash flow.”

T. Rowe Price: A 5% Yield From a Debt-Light Asset Manager

T. Rowe Price (NASDAQ:TROW) is the only high-yield name on this list. At $103.46, its $5.20 annualized dividend yields about 5.03%. The dividend represents 51.9% of trailing EPS of $9.96, which is moderate for a business with little capital spending.

Dividend safety: In 2025, free cash flow of $1.48 billion covered $1.14 billion in dividends, a free cash flow payout of 77.3%. Coverage is tighter than at the other four companies, and quarterly cash flow is uneven. The quarterly dividend has gone up every year from $0.76 in 2019 to $1.30 in 2026. Book value is $51.58 per share.

Bull case: Assets under management ended Q2 at a record $1.89 trillion. Adjusted EPS of $2.57 beat estimates. The ETF business added $4.4 billion in net inflows. At 10 times trailing earnings, any sign that flows are stabilizing could lift both the stock and the case for larger raises.

Risk: Clients took out a net $6.5 billion in Q2, and the CEO said second-half flows will be “meaningfully more challenging than the first half.” The fee rate slipped to 38.1 basis points. No analyst rates the stock a buy: there are 9 holds and 4 sell or strong-sell ratings.

Five Payouts With Room to Grow

All five companies pay out roughly half or less of their trailing earnings. Visa and JPMorgan have the most room relative to earnings. Lowe’s and Cisco have strong free cash flow coverage. T. Rowe Price pays the highest yield but has the least margin for error. The next round of increases will depend mostly on whether earnings keep growing, since none of these payouts is close to its limit. (For a tighter screen on companies that have already shown they can keep advancing, we ordered ten of the longest-running dividend growers by valuation in a free Dividend Kings report.)

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