Target Corporation (TGT), Lowe’s Companies, Inc. (LOW) & More: 5 Stocks Raising Dividends by Double-Digit Rates

Caterpillar

Caterpillar Inc. (NYSE:CAT) recently declared a 15.4% increase in its quarterly dividend, raising it by 8 cents to 60 cents per share. As a result, the company is now yielding 2.8% on a payout ratio of 35% of the analysts’ current-year consensus EPS estimate. This increase augments Caterpillar Inc. (NYSE:CAT)’s shareholder-friendly capital deployment through an earlier decision to resume share buybacks as of the second quarter of 2013 with $1 billion in accelerated share repurchases.

The higher shareholder allocations are a result of the company’s strong cash flow generation. Still, Caterpillar Inc. (NYSE:CAT)’s operational performance has been significantly weak. Its first-quarter total sales and revenues were down 17% year-over-year and profit per diluted share was down 45% from the previous year. The dismal performance was a result of a challenging global environment and negative inventory developments, coupled with moderating end-user demand. The company has also lowered its outlook for full-year financial results, citing a particularly weak mining segment performance, which has been hurt by soft commodity markets.

Still, in April, the company’s year-over-year global sales declines moderated in most markets, except for North America, while sales were particularly robust in Latin America. Continued emerging market urbanization and North American construction machinery replacement demand should help performance this year, suggest S&P analysts.

International Game Technology

International Game Technology (NYSE:IGT), a provider of interactive casino games, recently boosted its quarterly dividend by 1 cent to 9 cents per share. This was the company’s third dividend increase over the past year, with the new payout 50% higher than that paid in the same quarter last year. IGT has paid dividends for 41 consecutive quarters, which is the longest streak in its peer group. With the latest payout hike, the stock is yielding 2.1% on a payout ratio of 27% of the analysts’ current-year consensus EPS estimate.

IGT is seeing revenue momentum, with an 11% increase in revenues in the previous quarter. This year will likely mark the company’s fourth consecutive year of double-digit growth in adjusted EPS from continuing operations. In the firm’s fiscal second quarter, that indicator of profitability was up 33% year-over-year. Particularly robust has been the sales performance of social gaming, which saw a 349% increase in the six months ended March 31, from the same period a year earlier.  T

he company’s robust performance has been supported by its DoubleDown Casino, the world’s largest free-to-play, social casino with 5 million monthly social gamers, which became part of IGT following the acquisition of Double Down Interactive LLC in 2012. This summer, DoubleDown Casino will be expanding its reach through PlayPhone’s global mobile social gaming network.