In this article, we will take a detailed look at the 10 Stocks with Latest Dividend Increases. If you want to skip our detailed analysis and see the top 5 stocks in this list, click 5 Stocks with Latest Dividend Increases.
Crushing inflation and highly uncertain financial markets have caused many age-old investing beliefs to crumble apart over the past few months. One of these beliefs touted for staying away from dividend stocks if you want to get rich investing in the stock market. The proponents of this belief said only slow-moving, low-growth companies pay dividends and that’s why you should only invest in non-dividend stocks with high growth potential if you really want to double or triple your investments. But the market is clearly moving in the favor of dividend investing since more and more technology, growth-focused companies are starting to pay dividends. Earlier this month we had talked about how experts were already forecasting a broader shift towards dividend stocks, and mentioned some insights from Daniel Peris’s book “The Ownership Dividend – The Coming Paradigm Shift in the U.S. Stock Market.” Peris predicted that dividend investing will become more favorable because the era of low interest rates and buybacks seems to have ended.
Investors Love The Sweet Spot Between Growth and Income
Alphabet recently surprised investors by announcing its first-ever dividend. Investors also cheered Meta Platforms’ first-ever dividend announcement. Analysts believe these growth-focused companies are prioritizing shareholder returns as that is always welcomed by investors, especially during tough times. Some analysts were already anticipating Alphabet to announce a dividend policy. Earlier this month, a Bloomberg report cited Andrew Zamfotis, portfolio manager at Ami Asset Management Corp, who said that a dividend from Alphabet would be “well received” since there is “value” in cost discipline and capital returns. The analyst said while investors still like major technology companies focusing on growth, paying dividends show management is “prudent” and knows how to balance capital return and growth.
Don’t Miss: 10 Best Technology Dividend Aristocrats to Buy
The report also quoted Jenny Harrington, chief executive officer at Gilman Hill Asset Management, who thinks that dividend initiations and share buybacks are better decisions for companies too.
“Even if they’re getting 5% on cash, the credit they get for returning cash to shareholders through dividends, or the bump they get from buybacks, mean that those are better capital allocation decisions,” Harrington reportedly said.
Investing in dividend stocks could also be a solid strategy for hedging losses during difficult times. A report by S&P Global said that the S&P High Yield Dividend Aristocrats outperformed the S&P Composite 1500 and S&P 500 High Dividend Index by an average of 140 bps per month and 49 bps per month, respectively, during down market months starting Dec. 31, 1999, to March 31, 2022.
Dividend Stocks Shine During Market Turbulence
The S&P Global report highlighted that during this time period, the performance of dividend growth stocks was much better than S&P 1500 stocks and S&P High Dividend Index stocks during 15 worst-performing months. This shows that the benefits of investing in dividend growth stocks are felt when you are going through difficult, volatile times. During the 15 worst-performing months in the period starting from Dec. 31, 1999, to March 31, 2022, the S&P High Yield Dividend Aristocrats Index fell by about 7.29%, compared to the 10.87% fall of S&P 500 High Dividend Index and 9.58% decline for S&P Composite 1500.
Photo by Karolina Grabowska: https://www.pexels.com/photo/hands-holding-us-dollar-bills-4968630/
Dividend Stocks During High Market Volatility
Another important aspect of dividend investing brought to light by the S&P Global report is the effectiveness of dividend stocks during high volatility. The report shows that when the CBOE Volatility Index® (VIX®) jumped more than 40% at the end of the month from the beginning of the month, the S&P High Yield Dividend Aristocrats outperformed the benchmark S&P 1500 by 133 bps a month on average. When volatility decreases, the outperformance of S&P High Yield Dividend Aristocrats falls.
Methodology
With this backdrop and historical performance of dividend stocks in mind, let’s take a look at the companies that recently increased their dividends. For this article we first did some manual research and used stock screeners to identify the companies that recently increased their dividends. From these companies we picked 10 stocks with the highest number of hedge fund investors. Some top names in the list include WW Grainger Inc (NYSE:GWW), Metlife Inc (NYSE:MET) and Parker-Hannifin Corp (NYSE:PH). Insider Monkey’s monthly newsletter and portfolio that focuses on activist hedge funds, insider trading and stock picks from hedge fund investor newsletters and conferences returned 199.2% between March 2017 and March 12, 2024 and outperformed the S&P 500 ETFs’ 144.9% gain by more than 54 percentage points.
10. California Water Service Group (NYSE:CWT)
Number of Hedge Fund Investors: 8
California Water Service Group (NYSE:CWT) is one of the dividend stocks with latest hikes. On April 25, California Water Service Group (NYSE:CWT) increased its quarterly dividend by 7.7%. The new dividend is payable on May 17 to shareholders of record as of May 6.
A total of eight hedge funds tracked by Insider Monkey reported owning stakes in California Water Service Group (NYSE:CWT) as of the end of 2023.
9. Community Healthcare Trust Inc (NYSE:CHCT)
Number of Hedge Fund Investors: 15
Community Healthcare Trust Inc (NYSE:CHCT) ranks ninth in our list of the dividend stocks that recently saw a hike in payouts. Community Healthcare Trust Inc (NYSE:CHCT) increased its dividend by 0.5%. Forward dividend yield came in at about 7.1%.
Of the 933 hedge funds tracked by Insider Monkey, 15 hedge funds reported having stakes in Community Healthcare Trust Inc (NYSE:CHCT). The most significant stake in Community Healthcare Trust Inc (NYSE:CHCT) is owned by Israel Englander’s Millennium Management, valued at $13 million.
8. Portland General Electric Company (NYSE:POR)
Number of Hedge Fund Investors: 16
Portland, Oregon-based utilities company Portland General Electric Company (NYSE:POR) ranks eighth in our list of the companies with latest dividend increases. On April 22, Portland General Electric Company (NYSE:POR) increased its quarterly dividend by 5.3%. The new dividend is payable July 15 to the shareholders of record as of June 24.
During its Q4 earnings call in February, the company talked about guidance and dividend growth policy:
“Combined, we assume a 2% to 3% weather-adjusted retail load growth for 2024. These load dynamics as well as continued regional investment in a pipeline growth guidance of incoming projects give us continued confidence in our long-run load assumptions — expectations. As such, we are reiterating our long-term load growth guidance of 2% through 2027. We anticipate O&M expense ranging from $815 million to $840 million, which includes $165 million of earnings neutral regulatory deferral amortizations, wildfire mitigation and vegetation management costs and other offsetting items.
Net of these items, the midpoint of our O&M range represents a 3% compound annual growth rate compared to 2022 base O&M net of similar offsets. We remain committed to deploying the right tools to optimize productivity and provide the highest quality customer service while also managing operating costs. This philosophy, coupled with derisking accomplishments and critical investments made in 2023 give us continued confidence in our growth plan. As such, we are reiterating our long-term earnings growth and dividend growth guidance of 5% to 7%.”
Read the full earnings call transcript here.
7. Avery Dennison Corp (NYSE:AVY)
Number of Hedge Fund Investors: 23
Chemicals company Avery Dennison Corp (NYSE:AVY) is one of the notable dividend stocks with latest dividend increases. Avery Dennison Corp (NYSE:AVY) increased its dividend by 8.6% recently, marking its 14th consecutive year of dividend increases. Over the past one year Avery Dennison Corp (NYSE:AVY) shares have gained about 32%.
Of the 933 hedge funds tracked by Insider Monkey, 23 hedge funds reported owning stakes in Avery Dennison Corp (NYSE:AVY). In addition to AVY, WW Grainger Inc (NYSE:GWW), Metlife Inc (NYSE:MET) and Parker-Hannifin Corp (NYSE:PH) also upped their dividends.
6. Nasdaq Inc (NASDAQ:NDAQ)
Number of Hedge Fund Investors: 30
Nasdaq Inc (NASDAQ:NDAQ) ranks sixth in our list of companies that just hiked their dividends recently. On April 25, Nasdaq Inc (NASDAQ:NDAQ) upped its dividend by 9.1%.
Insider Monkey’s database of 933 hedge funds shows that 30 hedge funds had stakes in Nasdaq Inc (NASDAQ:NDAQ) as of the end of 2023. Thomas Steyer’s Farallon Capital had a $382 million stake in Nasdaq Inc (NASDAQ:NDAQ).
Like NDAQ, hedge funds are also buying WW Grainger Inc (NYSE:GWW), Metlife Inc (NYSE:MET) and Parker-Hannifin Corp (NYSE:PH).
TimesSquare Capital U.S. Mid Cap Growth Strategy stated the following regarding Nasdaq, Inc. (NASDAQ:NDAQ) in its fourth quarter 2023 investor letter:
“In Financials, we prefer well-placed insurance companies and niche businesses while tending to avoid banks which face credit deterioration and rising deposit costs. Nasdaq, Inc. (NASDAQ:NDAQ) is engaged in trading, clearing, exchange technology, regulatory, securities listing, and company services. Earnings outpaced consensus estimates due to the combination of stronger revenues and lower operating expenses. We decided to sell out of the position due to the upcoming close on their Adenza acquisition. We question the merits of this deal and prefer to watch from the sidelines for the time being. Nasdaq edged forward by 3% for the time it was held this quarter.”
Click to continue reading and see 5 Stocks With Latest Dividend Increases.
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Disclosure. None. 10 Stocks with Latest Dividend Increases was initially published on Insider Monkey.
