In addition to model portfolio holding Sonoco Products (SON),
which we highlighted last week, here are four names from the
S&P SuperComposite 1500 Index that we believe will increase
dividends in the second quarter.
Each company currently yields more than 2%, which is both the
average yield of the S&P 500 index and the yield of the
benchmark 10-year U.S. Treasury note.
In addition, these companies have boosted payouts at least 10
consecutive years, are expected to grow earnings in the
current year and can cover the dividend at least 2x with
expected full-year earnings. Readers will also note these four
stocks represent four different sectors of the market, in the
interest of seeing that investors maintain a diversified
Two names that don’t appear on this list, but likely would
have a year ago, are Chevron (CVX:NYSE) and ExxonMobil
(XOM:NYSE). CVX has increased its payouts 27 consecutive
years, while XOM has for 32 consecutive years. But with recent
fourth-quarter earnings reports, we seen how even the largest,
most-diversified energy companies have seen their earnings
power be decimated in the past six months because of lower
underlying commodity prices.
Target (TGT:NYSE) will likely raise its quarterly dividend in
June. The retailer currently pays out $0.52 a share (2.5%
yield) each quarter, which can be covered 2.2x with expected
fiscal 2016 (ending January) earnings of $4.55 a share. In
addition, the company’s bonds are A-rated.
Cullen/Frost Bankers (CFR) is expected to boost its quarterly
dividend for the 21st-consecutive year in April. The Texas-
based bank currently pays out $0.51 a share (2.9% yield) each
quarter, which is equal to 45% of expected 2015 earnings. The
company is also one of the few financial institutions we know
of that did not reduced its dividend during the crisis of
Johnson & Johnson (JNJ) will likely raise its quarterly
dividend for the 53rd-consecutive year in April. The drugmaker
currently pays out $0.70 a share (2.8% yield) each quarter,
which can be covered 2.2x with expected 2015 earnings of $6.20
a share. The company’s bonds are also AAA-rated.
Airgas (ARG) is expected to increase its quarterly dividend in
May. The industrial and maker of specialty gases currently
pays out $0.55 a share (2.1% yield) each quarter, which is
equal to 45% of expected fiscal 2015 (ended March) earnings of
David S. Peltier
Holdings still offer dividend opportunities.
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