Bank of America Corp (BAC), The Walt Disney Company (DIS), American Express Company (AXP): Expect More

Nevertheless, The Walt Disney Company (NYSE:DIS) could raise its dividend to the 2% range without sacrificing much in terms of financial flexibility. Look to see whether such a move comes when the company declares its annual dividend toward the end of this year.

American Express Company (NYSE:AXP)
High-end card company American Express Company (NYSE:AXP) also carries a low yield of less than 1.3%. It, too, has an extremely low payout ratio near 20%, indicating just how little of its earnings power it shares with its investors. Admittedly, AmEx has made modest moves to increase its payout in the past, with a 15% boost coming after the company passed the Fed’s stress tests earlier this year.

Whether American Express Company (NYSE:AXP) needs as much liquidity as it maintains depends on which strategic direction it takes in the future. With big competition brewing in the mobile payments arena, American Express Company (NYSE:AXP) might need substantial funds for capital expenditures if it wants to make a strong foray into the space. Yet if it merely chooses to take on projects like its Bluebird prepaid card offering, American Express Company (NYSE:AXP) could afford to return more of its capital through dividends without compromising its financial health.

Expect more
In general, stocks that pay dividends inspire confidence among shareholders because they prove that companies have investors’ interest in mind. These three Dow stocks might not boost their dividends in the near future, but if their long-term strategies pan out, then shareholders should expect rewards through higher dividends in the long run.

The article When Will These Dow Stocks Raise Their Dividends? originally appeared on Fool.com and is written by Dan Caplinger.

Fool contributor Dan Caplinger owns warrants on Bank of America. The Motley Fool recommends American Express, Bank of America, and Walt Disney (NYSE:DIS) and owns shares of Bank of America and Walt Disney.

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