In this article, we discuss 11 companies that just started paying dividends. You can skip our detailed analysis of dividend stocks and their performance over the years, and go directly to read 5 Companies that Just Started Paying Dividends.
Investors have long shown favor towards dividend stocks, prompting US companies to actively pursue the establishment, growth, and maintenance of their dividend policies. Conversely, companies are generally averse to reducing dividends due to the negative impact it has on public perception. Therefore, when a company opts to increase its dividend, it typically indicates that the board believes the higher payout is sustainable and well-founded. In 2023, the S&P 500 set a new annual record by paying $70.30 per share, marking an increase from the $66.92 paid in 2022. The total payout to shareholders reached a record-breaking $588.2 billion, surpassing the previous year’s figure of $564.6 billion, according to a report by S&P Dow Jones Indices. The report further highlighted a quarterly increase in total dividends, with a rise from $16.3 billion in Q4 2022 to $17.5 billion.
The significance of this dividend payout figure becomes apparent when analyzing the performance of dividend stocks in 2023. The importance lies in the fact that dividend equities faced a challenging year in the preceding period, primarily due to the dominance of the tech rally, resulting in underperformance. The S&P 500 Dividend Aristocrats index, which tracks companies that have consistently raised their dividend payments for the past 25 years, experienced a 5.7% increase in the previous year. This performance is notably lower when compared to the 26% gain in the S&P 500 total return index during the same period. However, analysts at Morgan Stanley are optimistic about the potential resurgence of dividend stocks in the current year. The decline in yields towards the end of 2023 is noted, and there is anticipation that they may further decrease if the Federal Reserve decides to reduce interest rates. Here is their statement in one of their investors’ notes:
“Investors are seeking durable, higher yielding dividends as market volatility is expected to continue throughout the easing cycle.”
In addition to the strong outlook of dividend stocks, the historical performance of companies that consistently increase their dividends has demonstrated resilience and strength over the years. According to data from Morgan Stanley dating back to 2014, companies within the Russell 1000 index that chose to raise their dividends experienced an average outperformance of 3.1% in stock prices over the six months following the announcement of the increase. Conversely, those companies that opted to lower their dividends witnessed an underperformance in stock prices, averaging 4.7% during the same period.
Walmart Inc. (NYSE:WMT), Johnson & Johnson (NYSE:JNJ), and AbbVie Inc. (NYSE:ABBV) are some of the best dividend stocks, having not only consistently distributed dividends to shareholders for an extended period but also demonstrated a track record of increasing their dividend payouts for decades. However, in this article, we will discuss companies that have just started paying dividends.
Our Methodology:
In this list, we mentioned stocks that have recently introduced their dividend policies in 2023 and 2024. In addition to this, we featured companies that had previously ceased dividend payments for some years but have now resumed payouts during this period. We considered their dividend yields and also measured hedge fund sentiment around each stock, according to Insider Monkey’s Q3 2023 data of 910 elite funds. The list is ranked in ascending order of the number of hedge funds having stakes in the companies. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). That’s why we pay very close attention to this often-ignored indicator.
11. MarketWise, Inc. (NASDAQ:MKTW)
Number of Hedge Fund Holders: 7
MarketWise, Inc. (NASDAQ:MKTW) is an American company that specializes in subscription-based services, MarketWise, Inc. delivers top-notch financial research, software, education, and tools. The company provides a diverse range of premium and independent investment research, coupled with various software and analytical tools.
MarketWise, Inc. (NASDAQ:MKTW) initiated its dividend policy in May 2023 with a per-share dividend of $0.01 every quarter. The company has been paying regular dividends since then and also paid a special dividend in October 2023. The stock has a dividend of 1.75%, as of February 5. It is among the companies that just started paying dividends.
MKTW can be added to dividend portfolios alongside some of the best dividend stocks, such as Walmart Inc. (NYSE:WMT), Johnson & Johnson (NYSE:JNJ), and AbbVie Inc. (NYSE:ABBV).
At the end of Q3 2023, 7 hedge funds tracked by Insider Monkey reported having stakes in MarketWise, Inc. (NASDAQ:MKTW), compared with 9 in the previous quarter. The overall value of these stakes is over $4 million. With over 1.2 million shares, Royce & Associates was the company’s leading stakeholder in Q3.
10. Veralto Corporation (NYSE:VLTO)
Number of Hedge Fund Holders: 11
Veralto Corporation (NYSE:VLTO) is a recently established firm backed by extensive global leadership in critical technology solutions. The company specializes in aiding customers in overseeing, addressing, purifying, and safeguarding the worldwide water supply. Their expertise extends from managing municipal and wastewater treatment facilities to preserving the health of lakes, rivers, watersheds, and oceans.
Veralto Corporation (NYSE:VLTO) currently pays a quarterly dividend of $0.09 per share and has a dividend yield of 0.47%, as of February 5. The company started paying dividends in October 2023.
As of the close of Q3 2023, 11 hedge funds in Insider Monkey’s database reported owning stakes in Veralto Corporation (NYSE:VLTO), worth collectively over $11.3 million.
Madison Investments mentioned Veralto Corporation (NYSE:VLTO) in its Q4 2024 investor letter. Here is what the firm has to say:
“And finally, we sold Veralto Corporation (NYSE:VLTO) which is a water purification and quality control systems company that was spun out of Danaher. We sold the company as valuation adequately reflected the company’s growth prospects.”
9. Borr Drilling Limited (NYSE:BORR)
Number of Hedge Fund Holders: 14
Borr Drilling Limited (NYSE:BORR) is next on our list of companies that just started paying dividends. It is a company that specializes in offshore drilling services. Offshore drilling involves the exploration and extraction of oil and gas reserves beneath the seabed. The company announced its first dividend in December 2023 of $0.05 per share. The stock’s dividend yield on February 5 came in at 0.70%.
In the third quarter of 2023, Borr Drilling Limited (NYSE:BORR) reported revenue of $191.5 million, which showed a 77.5% growth from the same period last year. The company’s net income for the quarter came in at $0.3 million.
At the end of September 2023, 14 hedge funds owned stakes in Borr Drilling Limited (NYSE:BORR), up from 13 in the preceding quarter, as per Insider Monkey’s database. The consolidated value of these stakes is more than $113 million.
8. Napco Security Technologies, Inc. (NASDAQ:NSSC)
Number of Hedge Fund Holders: 18
Napco Security Technologies, Inc. (NASDAQ:NSSC) is known for providing security products and systems for residential, commercial, institutional, and government applications. It is among the companies that just started paying dividends. In fiscal Q1 2024, the company posted revenue of $41.6 million, up 6% from the same period last year. Its operating cash flow for the quarter came in at over $11.3 million.
Napco Security Technologies, Inc. (NASDAQ:NSSC) announced its first dividend in May 2023 and has raised its payouts once since then. It currently offers a quarterly dividend of $0.08 per share and has a dividend yield of 0.89%, as of February 5.
Insider Monkey’s database of Q3 2023 indicated that 18 hedge funds owned stakes in Napco Security Technologies, Inc. (NASDAQ:NSSC), down from 27 in the previous quarter. These stakes have a total value of nearly $43 million. Among these hedge funds, Divisadero Street Capital was the company’s leading stakeholder in Q3.
7. WESCO International, Inc. (NYSE:WCC)
Number of Hedge Fund Holders: 35
WESCO International, Inc. (NYSE:WCC) is a Pennsylvania-based company that serves as a distributor of various products used in the construction, maintenance, repair, and operation (MRO) of facilities. The company primarily caters to a diverse range of industries, including electrical contractors, utilities, industrial organizations, government agencies, and more. It started its dividend policy in March 2023 with a quarterly dividend of $0.375 per share. The company’s dividend remains unchanged as of now. As of February 5, the stock has a dividend yield of 0.81%.
WESCO International, Inc. (NYSE:WCC) was a part of 35 hedge fund portfolios at the end of Q3 2023, compared with 43 in the preceding quarter, according to Insider Monkey’s database. The stakes owned by these hedge funds have a collective value of more than $1.78 billion.
Diamond Hill Capital mentioned WESCO International, Inc. (NYSE:WCC) in its Q3 2023 investor letter. Here is what the firm has to say:
“Shares of industrial distributor WESCO International, Inc. (NYSE:WCC) declined during the quarter amid a cyclical slowdown, which is impacting the company’s commercial construction and original equipment manufacturer (OEM) customers and has been exacerbated by inventory destocking. However, we believe the long-term secular outgrowth remains intact and WESCO is well-positioned to leverage its scale advantages to take share in the period ahead.”
6. Atkore Inc. (NYSE:ATKR)
Number of Hedge Fund Holders: 35
Atkore Inc. (NYSE:ATKR) ranks sixth on our list of companies that just started paying dividends. The American company specializes in manufacturing and distributing a wide range of products used in the construction and maintenance of electrical, mechanical, and safety systems. In its recently announced Q1 2024 earnings, the company reported revenue of $798.5 million, which beat analysts’ estimates by $21.45 million. The company ended the quarter with nearly $381 million available in cash and cash equivalents.
Atkore Inc. (NYSE:ATKR) announced its first quarterly dividend on January 30. The company currently offers a per-share dividend of $0.32 every quarter for a dividend yield of 0.86%, as of February 5. Though Atkore Inc. has just started paying dividends, it can be added to dividend portfolios alongside Walmart Inc. (NYSE:WMT), Johnson & Johnson (NYSE:JNJ), and AbbVie Inc. (NYSE:ABBV).
As of the end of the third quarter of 2023, 35 hedge funds tracked by Insider Monkey reported having stakes in Atkore Inc. (NYSE:ATKR), the same as in the previous quarter. The collective value of these stakes is over $453.6 million. With roughly 1 million ATKR shares, Gates Capital Management was the company’s largest stakeholder in Q3.
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Disclosure. None. 11 Companies that Just Started Paying Dividends is originally published on Insider Monkey.
