This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

3 Stocks With Ever-Increasing Dividends


Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

Credit card issuer MasterCard ( MA) really saw its business take off since the middle of the last decade. As it expanded its global reach, revenue shot up from $3.3 billion at the end of 2006 to $6.7 billion at the end of 2011. Still, the divided was stuck at 60 cents a share annually throughout the growth phase. Management thought it wise to preserve most of the cash flow to help fuel that international sales growth.

>>5 Big Trades for a Ping-Pong Market

These days, MasterCard is settling into a more mature phase, as revenue grew around 10% in 2012 (to $7.4 billion) and is expected to rise at a similar pace in 2013 and 2014. Yet even as the top line matures, this is still a remarkable bottom-line story. MasterCard's profit margins are already quite robust and growing higher still, thanks to a largely automated business model when additional incremental revenues flow quickly to the bottom line. Prior to last year, Master Card never earned more than $15 a share in its history before 2010. Now the company is on track to earn $25 a share this year and perhaps $30 a share next year, according to consensus forecasts.

Management has already responded by doubling the dividend to $1.20 a share in 2012 and doubling it again in 2013 to $2.40 a share. Guess what? That dividend is bound to double again, if not in 2014 then soon thereafter. Frankly, Mastercard's profits are now so robust that we may be looking at a $10 a share dividend by the end of the decade, especially as this company's cash is piling up so fast (recently exceeding $5 billion) and it carries no debt. Soon management will have almost no need to retain profits, at which point the dividend could be sharply hiked.

3 of 4

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Submit an article to us!
F $15.53 -1.58%
GME $40.02 -0.25%
MA $90.78 -0.44%
AAPL $125.80 -2.25%
FB $77.56 -1.59%


DOW 17,928.20 -142.20 -0.79%
S&P 500 2,089.46 -25.03 -1.18%
NASDAQ 4,939.3270 -77.6020 -1.55%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs