9. Caterpillar (CAT), 3-Year Dividend Growth: 29%
8. Coca-Cola (KO - Get Report), 3-Year Dividend Growth: 30%
7. J&J (JNJ - Get Report), 3-Year Dividend Growth: 30%
6. Microsoft (MSFT - Get Report), 3-Year Dividend Growth: 34%
5. P&G (PG - Get Report), 3-Year Dividend Growth: 39%
4. Wal-Mart (WMT - Get Report), 3-Year Dividend Growth: 43%
3. Un. Tech. (UTX), 3-Year Dividend Growth: 50%
2. Intel (INTC), 3-Year Dividend Growth: 71%
1. IBM (IBM), 3-Year Dividend Growth: 71%
Now, here is a look at the Dow companies expected to raise their dividend the most in 2011. 10. American Express ( AXP - Get Report) is a credit-card company. Third-quarter sales increased 9.7%, but net income and earnings per share more than doubled. American Express has grown its dividend 25% in the past year. It has boosted the payout 13%, on average, over three- and five-year spans. The stock receives buy recommendations from two-thirds of analysts in coverage. Piper Jaffray offers the highest price target, at $64, implying a 12-month gain of 43%. Credit Suisse rates the stock underperform with a low $40 target.
8. Johnson & Johnson ( JNJ - Get Report) sells consumer products, pharmaceuticals and medical devices. Its third-quarter profit inched up 2.2% to $3.4 billion, or $1.23 a share, as revenue declined marginally. J&J has boosted its quarterly distribution 9.3% in the past year, and 9.2% and nearly 11%, on average, respectively, over three- and five-year periods. Analysts are luke warm on the stock, which receives 13 buy ratings and 12 hold calls. No researchers advise selling. Citigroup predicts J&J's stock will advance 11% to $70. Goldman Sachs expects the shares to decrease to $59.
6. Microsoft ( MSFT - Get Report) is the world's largest software company, selling the Windows operating system and Office product suite. Fiscal first-quarter net income surged 51% to $5.4 billion, or 62 cents a share, as revenue extended 25%. Microsoft has increased its distribution 5.8% in the past year. It has grown the payout 10% and 11%, respectively, on average, over three- and five-year horizons. Three quarters of analysts in coverage recommend that clients buy Microsoft, making it the fourth highest-rated Dow stock. Stifel Financial projects a $40 price target.
4. Pfizer ( PFE - Get Report) is the world's largest pharmaceutical company. Third-quarter net income tumbled 70% to $866 million, or 11 cents a share, as revenue rebounded 39%. Despite being among the cheapest Dow stocks, with a forward P/E of just 7.9 (a 35% peer discount), many investors are avoiding Pfizer due to patent expiry in 2011. Currently, 19, or 70% of researchers, rank the stock buy, six rate it hold and two rank it sell. JPMorgan is most optimistic about upside, offering a $24 price target. Conversely, Citigroup predicts that the shares will drop nearly 7% to $17.
2. JPMorgan Chase ( JPM - Get Report) is a diversified financial services company. Like many other big-cap financials, JPMorgan cut its dividend during the financial crisis as it struggled to boost capital ratios and shore up its balance sheet. Currently, its stock pays a quarterly dividend of just five cents, converting to a paltry 0.5% yield. Researchers expect the payout to more than triple in the quarters ahead as earnings normalize. JPMorgan is the second highest-rated Dow stock, receiving positive reviews from 82% of analysts in coverage. FBR dissents, with a modest $45 target.