Dividend investing has remained an evergreen strategy for investors seeking a reliable stream of income from their investments, along with the potential for capital appreciation. By investing in companies that are fundamentally strong with a solid earnings base, operational moat, and prudent financial management, dividend-paying stocks can become a steady source of passive income for investors.
As uncertainties about the economy linger amid sticky inflation data and ongoing debate over a potential Fed rate cut in June, dividend stocks remain an attractive investment option for investors seeking stability - particularly as some long-time dividend stocks have been forced to cut or withhold payouts to preserve cash recently.
Against this backdrop, here are 7 dividend stocks that just hiked their investor payouts. Let's have a look.
Dividend Stock #1: Dick's Sporting Goods
With a mammoth market cap of $17.7 billion, Dick's Sporting Goods (DKS) is the largest sporting goods retailer in the U.S. Founded in 1948, they sell a wide range of sporting equipment, apparel, footwear, and accessories.
DKS stock is up a whopping 47.5% on a YTD basis, thanks in large part to Thursday's stellar earnings reaction.
Along with a beat on both the revenue and earnings front in its latest quarterly results, Dick's also raised its quarterly dividend by 10% to $1.10 per share. Now offering a dividend yield of 2.13%, DKS pays investors well above the sector median of 0.992%. DKS has been raising dividends over the past nine years with a payout ratio of 29.06%, leaving plenty of scope for further growth in dividends.
Overall, analysts have rated Dick's stock a “Moderate Buy.” However, the stock has now surpassed both its mean target price ($160.94) and the Street-high target price ($201). Out of 19 analysts covering the stock, 8 have a “Strong Buy” rating, 1 has a “Moderate Buy” rating, and 10 have a “Hold” rating.
Dividend Stock #2: American Express
Founded in 1850 as a freight forwarding company in Buffalo, New York, American Express (AXP) has transformed itself into a global financial and travel services giant. A Warren Buffett favorite, the company's key offerings include credit cards, payment processing services and travel-related services. It currently commands a huge market cap of $159.5 billion.
AXP stock is up 17.7% on a YTD basis.
AXP recently raised its quarterly dividend by 17% to $0.70 per share, boosting its forward dividend yield to 1.26%. Further, the payout ratio of just 21.41% suggests that the company has plenty of headroom left to increase its dividends in the future.
Analysts have deemed AXP stock a “Moderate Buy” with a mean target price of $204.10, which is below current prices, but the Street-high target price of $247 denotes an upside potential of roughly 12% from current levels.
Out of 24 analysts covering the stock, 11 have a “Strong Buy” rating, 2 have a “Moderate Buy” rating, 9 have a “Hold” rating, and 2 have a “Strong Sell” rating.
Dividend Stock #3: Waste Management
Founded in 1889 as a small garbage collection company, Waste Management (WM) now provides a comprehensive suite of waste collection, recycling, and disposal services for residential, commercial, and industrial clients. Their services include garbage and trash collection, recycling programs, hazardous waste disposal and landfill operations. Its market cap currently stands at $84.5 billion.
Waste Management's share price is up 17.6% on a YTD basis.
The company recently raised its quarterly dividend by 7.1% to $0.75 per share, marking the 21st consecutive year of dividend increase. With a forward yield of 1.42% and a payout ratio of 45.23%, Waste Management has left itself the scope to further increase this dividend in the future.
Overall, analysts have a consensus rating of “Moderate Buy" for Waste Management stock with a high target price of $230. This indicates an upside potential of about 9.7% from current levels. Out of 16 analysts covering the stock, 6 have a “Strong Buy” rating, 1 has a “Moderate Buy” rating and 9 have a “Hold” rating.
Dividend Stock #4: Travel + Leisure
Tracing its origins back to 1990, the current iteration of Travel + Leisure (TNL) is the world's leading membership and leisure travel company, with nearly 20 travel brands across its resort, travel club, and lifestyle portfolio. Formerly known as Wyndham Destinations, the company provides vacation ownership and exchange services, vacation rentals, and access to a network of resorts through memberships and subscriptions.
With a market cap of $3.17 billion, TNL stock is up 15.4% on a YTD basis.
Travel + Leisure recently raised its quarterly dividend by 11% to $0.50 per share from $0.45 per share. Now offering a forward dividend yield of 3.97%, TNL's payout ratio is 31.36%, which indicates that the company can comfortably raise its dividends further in the future.
Overall, analysts consider TNL stock a “Moderate Buy,” with a mean target price of $52.45. This denotes an upside potential of about 16.2% from current levels. Out of 10 analysts covering the stock, 7 have a “Strong Buy” rating, 1 has a “Moderate Buy” rating, 1 has a “Hold” rating, and 1 has a “Moderate Sell” rating.
Dividend Stock #5: Shoe Carnival
Founded in 1993, Shoe Carnival (SCVL) is a leading retailer of family footwear, offering a wide variety of athletic shoes, casual shoes, boots, and sandals for men, women, and children. Their business model focuses on providing a value proposition with a mix of national brands and private-label products. Its market cap is currently at about $868 million.
Shoe Carnival stock is up 7.4% on a YTD basis, and is set to report Q4 earnings on March 21.
Ahead of the earnings report, SCVL just raised its quarterly dividend by 12.5% to $0.135 per share. This marks the 48th consecutive quarterly and 10th consecutive yearly dividend increase by the company. And with a payout ratio of just 14.14% and a forward yield of 1.5%, SCVL can comfortably increase its dividend going forward.
Shoe Carnival stock has limited coverage among analysts, with a unanimous rating of “Strong Buy” from the two experts following the shares. The mean target price of $35 indicates an upside potential of about 7.8% from current levels.
Dividend Stock #6: Vail Resorts
Around since the early 1960s, Vail Resorts (MTN) has existed in its current iteration since 1997. It owns and operates several mountain resorts across North America, offering skiing, snowboarding, and other winter sports activities, along with lodging, dining, and other guest services. Its market cap currently stands at $8.4 billion.
Vail Resorts stock is up 4.1% on a YTD basis.
Alongside its fiscal Q2 results, the company recently raised its quarterly dividend by 8% to $2.22 per share. MTN's forward dividend yield now stands at 4.01%.
Overall, analysts have deemed MTN stock a “Hold,” with a mean target price of $247.78 - indicating an upside potential of roughly 10% from current levels. Out of 9 analysts covering the stock, 2 have a “Strong Buy” rating, 6 have a “Hold” rating and 1 has a “Strong Sell” rating.
Dividend Stock #7: Whitestone REIT
We conclude our list of stocks that recently raised their dividends with a real estate investment trust (REIT) - a section of the market that's synonymous with income investing. Founded in 1998, Whitestone REIT (WSR) focuses on acquiring, owning, managing, developing, and redeveloping shopping centers in culturally diverse, high-growth metropolitan areas. Its market cap currently stands at $599 million.
Shares of WSR are down marginally on a YTD basis.
The REIT pays dividends on a monthly schedule, and just raised those payouts by 3% on an annualized basis to $0.04125 per share. WSR's forward dividend yield is now at 4%.
Overall, analysts have deemed WSR stock a “Moderate Buy” with a mean target price of $13.30. This indicates an upside potential of about 10.6% from current levels. Out of 5 analysts covering the stock, 3 have a “Strong Buy” rating, 1 has a “Moderate Buy” rating, and 1 has a “Hold” rating.
