In this article, we discuss 5 companies that just increased their dividends by over 10%. If you want our detailed analysis of these stocks as well as the first five picks on the list, go directly to These 10 Companies Just Increased Their Dividends By Over 10%.
5. eBay Inc. (NASDAQ:EBAY)
Number of Hedge Fund Holders: 53
Percentage of Dividend Increase: 22.2%
eBay Inc. (NASDAQ:EBAY) is a California-based multinational e-commerce corporation that enables C2C and B2B sales transactions via its website. The company expanded its share repurchase authorization by an additional $4 billion on February 23 and declared a $0.22 per share quarterly dividend, a 22.2% increase from its prior dividend of $0.18. The dividend will be paid on March 18 to shareholders of record on March 10.
Publishing its fourth quarter results on February 23, eBay (NASDAQ:EBAY) posted earnings per share of $1.05, exceeding estimates by $0.06. The company’s $2.61 billion in revenue also outperformed the market consensus by $6.31 million.
Benchmark analyst Daniel Kurnos lowered his price target on eBay Inc. (NASDAQ:EBAY) to $75 from $85 on February 25 and kept a ‘Buy’ rating on the shares. The analyst observed that eBay (NASDAQ:EBAY) “finished the year on a high note” by exceeding consensus on all metrics in the holiday quarter, but shares traded lower after management discussed a slower recovery/exit growth trajectory. eBay (NASDAQ:EBAY) also signaled impending investment, which may not be ideal in this market. 2022 is now projected to be a down operating margin year, but there is still good value in shares at current levels, the analyst told investors.
A total of 53 hedge funds were bullish on eBay (NASDAQ:EBAY) at the end of Q4 2021, up from 49 funds in the preceding quarter. Nicolai Tangen’s Ako Capital owned the biggest stake in eBay (NASDAQ:EBAY), consisting of 4.9 million shares worth approximately $328 million.
Here is what Steel City Capital had to say about eBay Inc. (NASDAQ:EBAY) in its Q4 2020 investor letter:
“eBay (Long): EBAY continues to be a core holding in the Partnership’s long book despite not having any “sexy” attributes or unknown catalysts. I like EBAY because it checks the boxes of being both capital light and priced as a value stock (low multiple of free cash flow), factors which are attractive in a potentially inflationary environment.
In 3Q’20 the company printed $2.6 billion of revenue vs. guidance of $2.4 billion (a $200 million beat) while full year revenue guidance was taken up by $400 million, implying 4Q’20 would be higher by $200 million as well. Free cash flow from continuing ops was guided to $2.3 billion for the full year, slightly above the $2.0 billion the business regularly generated before getting a Covid/stimulus related boost.
EBAY will have about $4.6 billion of cash on hand at year end5 and should receive another $2.0 billion in after-tax proceeds this quarter related to the sale of its Classifieds portfolio6 . Additionally, the company will receive 540 million shares from Adevinta which are currently valued at ~$8.3 billion, and also holds a warrant to purchase a 5.0% stake in payment processor Adyen which was last valued at ~$775 million. Additional asset sales are also not out of the question7 . Backing everything out at today’s market cap of $38.2 billion gives a clean market cap for the core marketplace of $22.6 billion. At a minimum, I expect $2.0 billion of free cash flow in FY’21, with the potential for a higher figure to the extent the incoming administration is successful in cutting additional stimulus checks. By FY’22, free cash flow should ramp to $2.3 billion after incorporating a full year’s contribution from the managed payments initiative. This values EBAY at 9.6x free cash flow, or 11.7x excluding stock-based comp.”
4. The TJX Companies, Inc. (NYSE:TJX)
Number of Hedge Fund Holders: 56
Percentage of Dividend Increase: 13.5%
The TJX Companies, Inc. (NYSE:TJX) is an American multinational discount department chain that sells apparel, bedding, furniture, beauty products, and housewares.
On February 23, The TJX Companies, Inc. (NYSE:TJX) declared a $0.295 per share quarterly dividend, a 13.5% increase from its prior dividend of $0.260. The dividend is expected to be payable in June 2022. The company also plans to repurchase shares worth approximately $2.25 to $2.50 billion during its fiscal year ending January 28, 2023. The new authorization represents approximately 4% of The TJX Companies, Inc. (NYSE:TJX)’s outstanding shares at current prices.
Truist analyst Beth Reed lowered her price target on The TJX Companies, Inc. (NYSE:TJX) to $82 from $88 and kept a ‘Buy’ rating on the shares on February 25. The company’s Q4 results missed expectations due to the omicron variant and persistent freight pressures, but the stock’s pullback offers an attractive buying opportunity into a solid long-term growth story the analyst told investors in a bullish thesis.
Alkeon Capital Management is the biggest shareholder of The TJX Companies, Inc. (NYSE:TJX) among the funds tracked by Insider Monkey, owning 7.3 million shares worth $560.6 million. Overall, 56 hedge funds held long positions in The TJX Companies, Inc. (NYSE:TJX), with collective stakes amounting to more than $2 billion.
Here is what Qualivian Investment Partners had to say about The TJX Companies, Inc. (NYSE:TJX) in its Q2 2021 investor letter:
“TJX Companies: While it still outperformed the S&P 500, TJX landed in the bottom three as its stock’s tepid performance reflected the broader underperformance of stocks levered to post-COVID reopening. These were muted in the quarter given the resurgence of COVID cases due to the Delta variant. Its actual results, which it reported on August 18th, were outstanding, beating across the board on both top and bottom lines and showing strong operating leverage in the operating profit line. Same store sales were up an impressive 20% overall. We remain very confident in TJX’s moat in that its treasure hunt format is hard to replicate for the likes of Amazon and Walmart.”
3. The Home Depot, Inc. (NYSE:HD)
Number of Hedge Fund Holders: 68
Percentage of Dividend Increase: 15.2%
The Home Depot, Inc. (NYSE:HD) is an American home improvement retailer that sells construction tools, home appliances, builders hardware, and relevant services. The Home Depot, Inc. (NYSE:HD) declared a $1.90 per share quarterly dividend on February 22, a 15.2% increase from its prior dividend of $1.65, which will be payable on March 24.
Raymond James analyst Bobby Griffin lowered his price target on The Home Depot, Inc. (NYSE:HD) on February 24 to $350 from $420 and kept an ‘Outperform’ rating on the shares to better reflect the compressed valuation multiples for the sector. The Home Depot, Inc. (NYSE:HD) delivered a “solid” Q4 with comps and EPS above the consensus view, the analyst told investors in a research note.
Among the hedge funds tracked by Insider Monkey, 68 funds were bullish on The Home Depot, Inc. (NYSE:HD) at the close of Q4 2021, up from 58 funds a quarter earlier. Fisher Asset Management was the leading shareholder on that list with 7.8 million shares worth $3.2 billion.
Here is what Ensemble Capital Management had to say about The Home Depot, Inc. (NYSE:HD) in its Q4 2021 investor letter:
“On the more positive side, we saw notable performance contribution from Home Depot. In the midst of a housing shortage and rising home prices, Americans turned to home improvement projects with Home Depot’s startlingly fast growth in 2020 continuing throughout 2021. With each quarter that passed showing a continuation of strong growth rather than the slowdown that many investors expected, the stock led the S&P 500 for most of the year and turned in a heady 27% rally in the fourth quarter to close out the year. Notably, while Do It Yourself homeowners did indeed shop at Home Depot less than they did during record setting 2020, almost half of the company’s revenue comes from Pro contractors where strong growth continues.”
2. Danaher Corporation (NYSE:DHR)
Number of Hedge Fund Holders: 87
Percentage of Dividend Increase: 19%
Danaher Corporation (NYSE:DHR) is a Washington-based conglomerate that designs and markets professional, medical, industrial, and commercial products. The three main segments at Danaher Corporation (NYSE:DHR) are Life Sciences, Diagnostics, and Environmental and Applied Solutions.
Danaher Corporation (NYSE:DHR) reported a $0.25 per share quarterly dividend on February 23, a 19% increase from its previous dividend of $0.21. The dividend will be paid on April 29 to shareholders of record on March 25.
On January 27, Danaher Corporation (NYSE:DHR) announced its Q4 results, posting EPS of $2.69, beating estimates by $0.15. The company’s revenue for the period jumped 20.53% year-on-year to $8.15 billion, exceeding consensus estimates by $162.62 million.
Wells Fargo analyst Dan Leonard lowered the firm’s price target on Danaher Corporation (NYSE:DHR) to $330 from $350 on January 28 but kept an ‘Overweight’ rating on the shares, reflecting a view that its core growth algorithm and COVID-19 soft landing are underappreciated.
Dan Loeb’s Third Point is a significant stakeholder of Danaher Corporation (NYSE:DHR) as of the end of 2021, owning 2.90 million shares worth over $954 million. Overall, 87 hedge funds were bullish on Danaher Corporation (NYSE:DHR) at that time, up from 74 funds in the previous quarter.
Here is what ClearBridge Sustainability Leaders Strategy had to say about Danaher Corporation (NYSE:DHR) in its Q3 2021 investor letter:
“Diversified health care company Danaher, a top contributor in the second quarter, had a strong third quarter as well, posting a strong beat-and-raise driven by COVID-19 testing, a rebound for in-person activity and no impact from variants/renewed shutdowns.”
1. Thermo Fisher Scientific Inc. (NYSE:TMO)
Number of Hedge Fund Holders: 95
Percentage of Dividend Increase: 15%
Based in Waltham, Massachusetts, Thermo Fisher Scientific Inc. (NYSE:TMO) supplies analytical equipment and instruments, laboratory reagents, consumables, science software, and technical services.
On February 23, Thermo Fisher Scientific Inc. (NYSE:TMO) reported a $0.30 per share quarterly dividend, a 15% increase from its earlier dividend of $0.26. The dividend will be distributed on April 14 to shareholders of record on March 16.
Thermo Fisher Scientific Inc. (NYSE:TMO) announced exceptional Q4 results on February 2. The company posted earnings per share of $6.54, topping estimates by $1.27. Revenue for the period was $10.70 billion, surpassing the market consensus by $1.45 billion.
Nonetheless, Wells Fargo analyst Dan Leonard lowered his price target on Thermo Fisher Scientific Inc. (NYSE:TMO) to $605 from $700 on February 3, though he did keep an ‘Equal Weight’ rating on the shares. The rating comes in the wake of strong quarterly results and high post-pandemic expectations.
According to the Q4 database of Insider Monkey, 95 hedge funds held long positions in Thermo Fisher Scientific Inc. (NYSE:TMO) on December 31, up from 94 funds three months earlier. David Blood and Al Gore’s Generation Investment Management is a prominent shareholder of the company, with 1.20 million shares worth $803 million.
Here is what L1 Capital had to say about Thermo Fisher Scientific Inc. (NYSE:TMO) in its Q3 2021 investor letter:
“Included in these adjustments, in early July 2021, we divested our remaining small investment in Thermo Fisher Scientific (Thermo Fisher), the world leader in the provision of equipment, consumables, and services to the Life Sciences industry. Thermo Fisher has benefited from elevated demand for its products and services associated with COVID-19 and we sold our residual investment at a gain of more than 70% compared to our average investment cost. Thermo Fisher subsequently held an Investor Day and positively surprised many people, including us, with very strong medium-term growth targets, notwithstanding a headwind from normalization of COVID-19-related business. Thermo Fisher is a high-quality business and remains on our ‘Bench’ for potential reinvestment.”
For more compelling stock picks, check out Viking Global’s Top 10 Stocks and 10 Best Telecom Dividend Stocks To Buy for 2022.
