15 Companies that Just Started Paying Dividends

Published on March 2, 2023 at 5:00 pm by Vardah Gill in Dividend Stocks, Hedge Funds, News

In this article, we discuss companies that just started paying dividends. You can skip our detailed analysis of dividend stocks and their importance, and go directly to read 5 Companies that Just Started Paying Dividends.

The pandemic of 2020 took a toll on dividend payments in the US stock market. Nearly 190 companies ceased their dividends during that year, according to S&P Global Market Intelligence data. However, considering investors’ inclination toward dividends, over 60% of these companies reinstated their payouts through last year.

Though 2022 was a challenging year for the capital markets, it opened new investment avenues for investors. Previously overlooked dividend equities remained their top priorities due to their ability to generate stable and regular income. Moreover, these companies have shown solid performance during inflationary periods in comparison to their peers. According to a report by AMG Funds, dividend payments in the S&P 500 increased by an annual average rate of 6% over the past five decades, which is above the rate of inflation in the US during this period. The report also cited data from Ned Davis Research and mentioned that since 1979, dividend payers outpaced other asset classes in periods when 10-year Treasury is rising.

When investing in dividend stocks, investors turn to companies that have strong dividend growth streaks under their belt. Moreover, these companies also have solid cash flow generation that indicates future dividend growth. Exxon Mobil Corporation (NYSE:XOM), PepsiCo, Inc. (NASDAQ:PEP), and The Procter & Gamble Company (NYSE:PG) are some examples of popular dividend stocks with strong credentials.

Amid the fluctuating market conditions, companies in the S&P 500 paid record dividends last year, amounting to $561 billion, up from $511.2 billion in 2021. The trend is likely to continue this year as well as many companies have shown confidence in their cash flow and capital investments. In addition to this, several corporations also initiated their dividend policies to attract investors. In this article, we will discuss those companies that just started paying dividends.

Photo by NeONBRAND on Unsplash

Our Methodology:

In this list, we mentioned stocks that have initiated their dividend policies in the last 36 months. We considered their dividend yields and also measured hedge fund sentiment around each stock, according to Insider Monkey’s Q4 2022 data of 943 elite funds. The stocks are ranked in ascending order of their dividend yields, as of March 2.

15 Companies that Just Started Paying Dividends

15. Academy Sports and Outdoors, Inc. (NASDAQ:ASO)

Dividend Yield as of March 2: 0.51%

Academy Sports and Outdoors, Inc. (NASDAQ:ASO) is a Texas-based sporting goods store chain that specializes in related products. The company started paying dividends in March 2022 and hasn’t raised its payout yet. It currently offers a quarterly dividend of $0.075 per share and has a dividend yield of 0.51%, as of March 2. It is among the companies that just started paying dividends.

Academy Sports and Outdoors, Inc. (NASDAQ:ASO) can be added to dividend portfolios alongside Exxon Mobil Corporation (NYSE:XOM), PepsiCo, Inc. (NASDAQ:PEP), and The Procter & Gamble Company (NYSE:PG).

In fiscal Q3 2023, Academy Sports and Outdoors, Inc. (NASDAQ:ASO) reported revenue of $1.5 billion, which fell by 6.3% from the same period last year. The company had over $318.2 million available in cash and cash equivalents and its operating cash flow was over $50.8 million.

In February, Cowen initiated its coverage on Academy Sports and Outdoors, Inc. (NASDAQ:ASO) with an Outperform rating and a $72 price target. The firm expects the company’s same-store sales to grow this year.

At the end of Q4 2022, 34 hedge funds in Insider Monkey’s database owned stakes in Academy Sports and Outdoors, Inc. (NASDAQ:ASO), up from 31 in the previous quarter. These stakes have a total value of nearly $345 million. With over 1.2 million shares, Tensile Capital was the company’s leading stakeholder in Q4.

14. ChampionX Corporation (NASDAQ:CHX)

Dividend Yield as of March 2: 1.06%

ChampionX Corporation (NASDAQ:CHX) is an American company that specializes in energy solutions. The company mainly specializes in pump and pumping equipment. In February, Citigroup lifted its price target on the stock to $40 with a Buy rating on the shares, adding the company to its ‘positive catalyst watch’.

ChampionX Corporation (NASDAQ:CHX) started paying dividends in February 2022. The company raised its quarterly dividend by 13% to $0.085 per share on February 16, 2023. The stock has a dividend yield of 1.06%, as of March 2.

In the fourth quarter of 2022, ChampionX Corporation (NASDAQ:CHX) reported revenue of $986 million, which showed a 19.9% growth from the same period last year. The company’s operating cash flow for the quarter came in at $195 million. Its free cash flow represented 17% of its revenue at $168.6 million.

The number of hedge funds tracked by Insider Monkey owning stakes in ChampionX Corporation (NASDAQ:CHX) grew to 27 in Q4 2022, from 19 in the previous quarter. The collective value of these stakes is over $385.2 million.

13. Laboratory Corporation of America Holdings (NYSE:LH)

Dividend Yield as of March 2: 1.21%

Laboratory Corporation of America Holdings (NYSE:LH) is a North Carolina-based healthcare company that owns one of the largest laboratory networks in the world. In the fourth quarter of 2022, the company reported revenue of $3.7 billion, down from $4.1 billion in the same period last year. The company’s free cash flow for the quarter amounted to $536 million, which was sufficient for $63.6 million worth of dividend payments.

Baird raised its price target on Laboratory Corporation of America Holdings (NYSE:LH) in February to $300 and maintained an Outperform rating on the shares.

Laboratory Corporation of America Holdings (NYSE:LH) started paying dividends in April 2022 with a per-share payout of $0.72 every quarter. Since then, the company has not announced a hike in its dividend. The stock’s dividend yield on March 2 came in at 1.21%.

As of the close of Q4 2022, 37 hedge funds in Insider Monkey’s database owned stakes in Laboratory Corporation of America Holdings (NYSE:LH), worth nearly $940 million collectively. Among these hedge funds, JANA Partners was the company’s largest stakeholder.

12. Covenant Logistics Group, Inc. (NASDAQ:CVLG)

Dividend Yield as of March 2: 1.25%

Covenant Logistics Group, Inc. (NASDAQ:CVLG) is an American transport company that specializes in truckload shipping. The company started paying dividends in January 2022 at $0.0625 per share. Since then, it has raised its payouts twice. The company currently pays a quarterly dividend of $0.11 per share and has a dividend yield of 1.25%, as of March 2.

In January, Wolfe Research upgraded Covenant Logistics Group, Inc. (NASDAQ:CVLG) to Peer Perform due to the company’s efficient share repurchase program.

In the fourth quarter of 2022, Covenant Logistics Group, Inc. (NASDAQ:CVLG) reported revenue of $296 million, which saw a 0.6% growth from the prior-year period. Through December 2022, the company paid nearly $4.3 million to shareholders in dividends.

At the end of Q4 2022, 9 hedge funds tracked by Insider Monkey owned stakes in Covenant Logistics Group, Inc. (NASDAQ:CVLG), the same as in the previous quarter. The collective value of these stakes is over $15.4 million, compared with $11.1 million worth of stakes owned by hedge funds a quarter earlier.

11. Marcus & Millichap, Inc. (NYSE:MMI)

Dividend Yield as of March 2: 1.45%

Marcus & Millichap, Inc. (NYSE:MMI) is a California-based company that provides real estate brokerage and mortgage brokerage services. In Q4 2022, the company posted revenue of $262.4 million, which beat estimates by $1.75 million. At the end of December, it had over $235.8 million available in cash and cash equivalents.

Since the start of its dividend policy in February through December 2022, Marcus & Millichap, Inc. (NYSE:MMI) has paid two regular semi-annual dividends and one special dividend amounting to over $62.6 million. It currently pays a semi-annual dividend of $0.25 per share and has a dividend yield of 1.45%, as of March 2.

As of the end of December 2022, 11 hedge funds tracked by Insider Monkey reported owning stakes in Marcus & Millichap, Inc. (NYSE:MMI), compared with 13 in the previous quarter. These stakes have a total value of over $94 million. Among these hedge funds, Sprott Asset Management was the company’s leading stakeholder in Q4.

10. Provident Bancorp, Inc. (NASDAQ:PVBC)

Dividend Yield as of March 2: 1.75%

Provident Bancorp, Inc. (NASDAQ:PVBC) is an American bank holding company that provides personal and business banking services to its consumers. The company started paying dividends in March 2020 and currently pays a quarterly dividend of $0.04 per share. It has raised its payout once since then. The stock has a dividend yield of 1.75%, as recorded on March 2.

In the fourth quarter of 2022, Provident Bancorp, Inc. (NASDAQ:PVBC) reported revenue of $20.6 million, up 26% from the same period last year. At the end of December, the company had over $80.6 million available in cash and cash equivalents and its total assets amounted to over $1.6 billion.

As per Insider Monkey’s Q4 2022 database, 9 hedge funds reported having stakes in Provident Bancorp, Inc. (NASDAQ:PVBC), up from 4 in the previous quarter. These stakes have a consolidated value of over $5.8 million. Ken Griffin’s Citadel Investment Group was the company’s leading stakeholder in Q4.

9. Herc Holdings Inc. (NYSE:HRI)

Dividend Yield as of March 2: 1.76%

Herc Holdings Inc. (NYSE:HRI) is an American company that specializes in the supply of rental equipment. In February, KeyBanc raised its price target on the stock to $175 with an Overweight rating on the shares, highlighting the company’s recent quarterly earnings.

In the fourth quarter of 2022, Herc Holdings Inc. (NYSE:HRI) reported revenue of $786 million, which showed a 36% growth from the same period last year. The company had over $53 million available in cash and cash equivalents at the end of December, up from $35 million in 2021.

Herc Holdings Inc. (NYSE:HRI) started paying dividends in September 2021 and has raised its dividends every year since then. The company offers a per-share dividend of $0.6325 every quarter and has a dividend yield of 1.76%, as recorded on March 2.

At the end of December 2022, 22 hedge funds tracked by Insider Monkey owned stakes in Herc Holdings Inc. (NYSE:HRI), compared with 25 in the previous quarter. These stakes have a consolidated value of over $1 billion.

Alger Capital mentioned Herc Holdings Inc. (NYSE:HRI) in its Q2 2022 investor letter. Here is what the firm has to say:

“Herc Holdings Inc. (NYSE:HRI) is one of North America’s largest equipment rental companies with products for construction, moving materials and other functions. We believe the company has strong fundamentals, but its stock underperformed because cyclical equities have gone out of favor with many investors due to the Fed increasing interest rates and investors’ growing fears that a potential recession could hurt construction activity in the U.S. In addition, Herc provided mixed results for its first quarter, including profitability falling below expectations as determined by the consensus of analysts at financial services firms. Nevertheless, the company raised its guidance for the fiscal year.

One of Herc’s s main competitors has indicated that rental demand continues to be very strong. Additionally, we believe a decade of underinvestment in capital improvements could support demand for rental equipment.”

8. BayCom Corp (NASDAQ:BCML)

Dividend Yield as of March 2: 1.95%

BayCom Corp (NASDAQ:BCML) is a California-based bank holding company. It started paying dividends in February 2022 with a per-share payout of $0.05 every quarter. After a year, the company announced a 100% hike in its quarterly dividend at $0.10 per share. The stock’s dividend yield on March 2 came in at 1.95%.

In the fourth quarter of 2022, BayCom Corp (NASDAQ:BCML) reported a 28.5% year-over-year growth in its revenue at $28 million. The company’s net interest income for the quarter came in at $26.5 million, up from $24.7 million in the prior-year period.

As of the close of Q4 2022, 6 hedge funds in Insider Monkey’s database owned stakes in BayCom Corp (NASDAQ:BCML), compared with 7 in the previous quarter. These stakes have a total value of over $21.6 million. Basswood Capital was the leading stakeholder of the company in Q4.

7. Royalty Pharma plc (NASDAQ:RPRX)

Dividend Yield as of March 2: 2.25%

Royalty Pharma plc (NASDAQ:RPRX) is an American company that acquires biopharmaceuticals royalties. In the fourth quarter of 2022, the company reported revenue of $566 million, which showed a 1.7% decline from the same period last year. The company’s operating cash flow for the quarter came in at $570 million and its adjusted cash flow for the quarter amounted to $946 million.

On January 9, Royalty Pharma plc (NASDAQ:RPRX) declared a 5.3% hike in its quarterly dividend to $0.20 per share. This was the company’s third consecutive year of dividend growth since it started paying dividends in September 2020. The stock’s dividend yield on March 2 came in at 2.25%.

According to Insider Monkey’s Q4 2022 database, 36 hedge funds owned stakes in Royalty Pharma plc (NASDAQ:RPRX), growing from 29 in the previous quarter. These stakes have a total value of over $1.12 billion.

6. Algoma Steel Group Inc. (NASDAQ:ASTL)

Dividend Yield as of March 2: 2.44%

Algoma Steel Group Inc. (NASDAQ:ASTL) is a Canada-based steel production company. The company currently pays a quarterly dividend of $0.05 per share and has a dividend yield of 2.44%, as of March 2. The company hasn’t raised its payouts since the start of its dividend policy in February 2022 unlike Exxon Mobil Corporation (NYSE:XOM), PepsiCo, Inc. (NASDAQ:PEP), and The Procter & Gamble Company (NYSE:PG), which has been raising their dividends for decades.

BMO Capital raised its price target on Algoma Steel Group Inc. (NASDAQ:ASTL) to C$15 in February and maintained an Outperform rating on the shares.

Algoma Steel Group Inc. (NASDAQ:ASTL) was a part of 34 hedge fund portfolios in Q4 2022, down from 39 in the previous quarter, as per Insider Monkey’s database. The stakes owned by these hedge funds have a total value of $268.5 million.

Nordstern Capital mentioned Algoma Steel Group Inc. (NASDAQ:ASTL) in its Q3 2022 investor letter. Here is what the firm has to say:

“The world is short on raw materials and energy. Nordstern Capital has increased its exposure to raw materials and energy. Recession fears may temporarily suppress demand and prices. The fundamental issue, however, is a sustainable lack of supply, caused by decade-long underinvestment. The shortages cannot be resolved in the short to medium term.

Currently suppressed stock prices offer a wonderful opportunity for our commodity businesses to buy back their own shares. For instance, Algoma Steel Group (NASDAQ:ASTL) reduced its diluted share count this year from 177 million to 111 million. Nonetheless, ASTL’s share price has come down 50%, because US HRC steel prices per ton declined in the past year from $2,000 to currently $713. Today, ASTL has $500m in net cash and a market capitalization of about $700m. The company is profitable even in the current recessionary environment. The CFO expects annual mid-cycle free cash flow generation greater than the current ASTL enterprise value. This is one illustrative example. ASTL is not alone. Many present-day commodity businesses are cash and earnings rich and can use weak stock prices for aggressive buybacks.”

Click to continue reading and see 5 Companies that Just Started Paying Dividends.

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15 Companies that Just Started Paying Dividends

Published on March 2, 2023 at 5:00 pm by Vardah Gill in Dividend Stocks, Hedge Funds, News

15 Companies that Just Started Paying Dividends

15. Academy Sports and Outdoors, Inc. (NASDAQ:ASO)

14. ChampionX Corporation (NASDAQ:CHX)

13. Laboratory Corporation of America Holdings (NYSE:LH)

12. Covenant Logistics Group, Inc. (NASDAQ:CVLG)

11. Marcus & Millichap, Inc. (NYSE:MMI)

10. Provident Bancorp, Inc. (NASDAQ:PVBC)

9. Herc Holdings Inc. (NYSE:HRI)

8. BayCom Corp (NASDAQ:BCML)

7. Royalty Pharma plc (NASDAQ:RPRX)

6. Algoma Steel Group Inc. (NASDAQ:ASTL)

AI Fire Sale: Insider Monkey’s #1 AI Stock Pick Is On A Steep Discount

Published on December 13, 2024 at by Inan Dogan, PhD

A New Dawn is Coming to U.S. Stocks

Published on November 16, 2024 at by Insider Monkey Staff