So now we're rolling. The new earnings season is upon us, and we can expect a fresh wave of dividend increases. There weren't a great many lifts last week, but enough to kick a new season into gear. Here are three notable companies that hoisted their payouts skyward.
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Thor Industries
Barreling down the road like a recreational vehicle stuffed with eager travelers is incumbent RV maker Thor Industries (THO 1.10%). Thanks to very favorable developments in its business, the company has plenty of room to hike its quarterly dividend by 10% to $0.33 per share.
RVs have been growing mightily in popularity since the Great Recession, with unit sales rising every year from 2010. As one of the industry's key players, Thor is a prime beneficiary of this trend.
THO Net Income (TTM) data by YCharts.
Last month the company reported a Q4 and fiscal 2016 that smashed records, notably those for Q4 sales and bottom line. Both beat estimates, rising by a respective 20% and 22% on a year-over-year basis.
Like one of the towable RVs that has become an increasingly important part of Thor's product mix, cash flow has slipstreamed behind the improvements in top and bottom line. Free cash flow in fiscal 2016 zoomed 41% higher than the 2015 figure to land at over $289 million.
This was much more than sufficient to fund the increased payout. Assuming the RV market continues to thrive, we can expect more raises in the future.
Thor's next distribution is to be paid on Nov. 7 to shareholders of record as of Oct. 24. At the latest closing stock price, it would yield 1.6%; by comparison, the current average yield of dividend-paying stocks on the S&P 500 index is 2.1%.
International Paper
Sprawling pulp and paper company International Paper (IP +4.41%) is making its stockholders a bit richer. It has declared a 5% raise in its quarterly dividend to just over $0.46 per share.
The "International" in the company's name is no exaggeration; it has operations in a great many corners of the globe. That's not necessarily to its advantage, though, given the sluggishness in certain foreign economies and the continued strength of the dollar.
IP Net Income (TTM) data by YCharts.
In International Paper's most recently reported quarter, sales slumped by 7% on a year-over-year basis (to $5.3 billion), while net profit cratered by 82% to hit $40 million. The latter, however, was affected by a $270 million charge booked for a pension settlement to a group of former employees.
The company's key units are still turning in growth, although the annual free cash flow is down from years past. Dividend payouts and stock repurchases totaled a bit higher than FCF for 2015 -- almost $1.3 billion, against less than $1.1 billion -- which is uncomfortable to see.
It's reasonable, then, to have some doubt about the future of International Paper's dividend.
Said payout will next be dispensed on Dec. 15 to investors of record as of Nov. 15. It theoretically yields a rich 3.9% on the current stock price.
Eaton Vance
The final raiser in our trio has been the most dependable. Investment management company Eaton Vance (EV +0.00%) is a dividend aristocrat. This exalted designation is reserved for the handful of stocks that have lifted their distributions at least once annually for 25 or more years in a row.
Eaton Vance is extending its streak to 36 years with a 6% bump in its quarterly distribution, to $0.28 per share.
Other numbers aren't rising, however. In its Q3, Eaton Vance saw revenue decline by 4% on a year-over-year basis to $341 million because of an erosion in its bread and butter, advisory and administrative fees. Adjusted net profit also declined by 6% to just over $64 million.
On the bright side, the crucial assets under management figure saw a nice 7% increase to $334 billion.
That AUM improvement bodes well for Eaton Vance's future performance. But the company really likes its dividend and its share repurchases, and combined, they have well exceeded free cash flow across the last few years.
If that habit continues, it's possible one or the other activity will have to get a serious haircut. Income investors will be hoping it's not that aristocratic dividend.
EV Total Dividends Paid (Annual) data by YCharts.
Eaton Vance's upcoming payout is to be distributed on Nov. 15 to stockholders of record as of Oct. 31. The new amount would yield just over 3% at the most recent closing stock price.
