Looking for dividend stocks? Here are five companies that appear poised to up their payouts in the near future.
Reality Shares Advisors, a San Diego-based asset management firm that specialized in dividends and isolated dividend growth strategies, has created DIVCON, a dividend health rating system that assesses the likelihood that companies will grow or cut their dividends. Like the U.S. Armed Forces' DEFCON system, DIVCON utilizes a five-tier rating system to provide a snapshot of companies' dividend health. A DIVCON 5 rating indicates the highest probability for a dividend increase, while a DIVCON 1 rating indicates the highest probability for a cut.
To decipher ratings, Reality Shares uses a weighted average of seven factors measuring the relationships among historic dividend trends, cash flow and earnings, buybacks, consensus forecasts and external financial ratings.
Thus far, DIVCON ratings have proven quite accurate, especially on the dividend boost side. According to Kian Salehizadeh, a senior analyst at Reality Shares, across the firm's three DIVCON indices historically (from 2001 through 2015), dividend growers rated at levels 5 and 4 have increased their payouts 95% of the time within 12 months of receiving such rating.
DIVCON recently upgraded five S&P 500 companies to its DIVCON 5 rating -- in other words, companies it thinks are ripe for payout bumps. Here are the companies that as of July it says have a high probability of increasing their dividends over the next 12 months.
Be sure to also check out DIVCON's new level 1 additions in "These 3 Companies' Dividends Are in Danger."
Equifax (EFX) increased its quarterly payout to 33 cents per share from 29 cents per share at the start of the year, giving it a 1% yield. According to DIVCON, it stands to increase its distribution again soon.
Equifax provides information solutions and human resources business process outsourcing services for businesses and consumers. It has a $15.9 billion market cap and trades at a P/E of 34.49.
Delta Air Lines
Delta Air Lines (DAL) currently has a 2.2% dividend yield. It recently increased its quarterly distribution to 20.25 cents per share from 13.5 cents per share.
Delta provides scheduled air transportation for passengers and cargo throughout the U.S. and around the world. The company's business segments are airline and refinery. It has a $28.2 billion market cap and trades at a P/E of 6.31.
Reynolds American (RAI) will make its next dividend payment of 46 cents per share in October, up from the 42 cents per share it distributed at the start of July. It has a 3.4% yield.
Reynolds American, through its subsidiaries, manufactures cigarettes and other tobacco products in the U.S. It has a $69.8 billion market cap and trades at a P/E of 35.50.
Unum Group provides disability insurance products in the U.S. and the U.K. It also provides a portfolio of other insurance products, including employer- and employee-paid group benefits, life insurance and other related services. It has an $8 billion market cap and trades at a P/E of 9.18.
PPG Industries (PPG) upped its quarterly distribution to 40 cents per share from 36 cents per share earlier this year and now has a yield of 1.5% According to DIVCON, that number could soon be higher.
PPG is engaged in manufacturing and distributing coatings, specialty materials and glass products. The company has three reportable business segments: performance coatings, industrial coatings and glass. It has a $27.8 billion market cap and trades at a P/E of 19.35.