Now, that's a little better.
After a few sluggish weeks with only the occasional dividend raise, the market started to wake up last week with a slightly higher number of increases. We're still some distance from the next earnings season, so it's good we have this to maintain investor income morale. Here are three notable recent raisers.
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Verizon
Big telecom services provider Verizon (VZ 1.78%) is dialing up a higher dividend. The company said its next quarterly payout will be $0.59 per share, a 2% bump from the preceding amount.
It's not easy to grow a business when you're one of its top incumbents. Compounding that, determined competition has forced Verizon to offer unlimited mobile plans, which of course affects revenue. Nevertheless, the company did a good job adding new subscribers in its most recently reported quarter and landed comfortably in the black on the bottom line during the period.
Verizon isn't the cash-generating machine it once was, which could develop into a problem. Trailing-12-month free cash flow was down substantially, at under $2.4 billion -- substantially below what the company handed out in dividends. Meanwhile, the new dividend's payout ratio is 61% -- not an alarming number, but not particularly low, either.
VZ Free Cash Flow (TTM) data by YCharts
I think the company is well and capably managed, and it's doing a nice job retaining existing users and attracting new ones. With that in mind, I wouldn't be surprised to see those cash flow numbers head north again, so I'd count on at least seeing the new dividend being maintained.
Verizon's new distribution is to be paid on Nov. 1 to shareholders of record as of Oct. 10. It would yield 5.1%, well above the current 1.9% average yield of dividend-paying stocks on the S&P 500.
Royal Caribbean Cruises
A much more substantial dividend raise is taking place at Royal Caribbean Cruises (RCL +2.08%). The cruise-ship operator is lifting its quarterly payout by 25% to $0.60 per share.
This isn't the first time the company has added plenty of coin to its dividend. In fact, over the past few years, each of its increases has been at least 20% over that of its predecessor.
RCL Dividend data by YCharts
Regardless, this new one is a fitting souvenir for a company that's in the midst of a pleasant journey. Buoyed by very favorable trends in the broader cruise industry, Royal Caribbean has lately grown occupancy, overall revenue, and profitability. For its Q2, it beat analyst estimates for the latter two line items, delivering 4% year-over-year revenue growth (to $2.2 billion), and a beefy 61% rise in net profit, to nearly $370 million.
Royal Caribbean's total dividend spending is modest. Even when we mash the substantially higher new dividend against the Q2 per-share earnings figure, we get a fairly skinny payout ratio of 35%. And the company's spend on the dividend plus share buybacks has been easily covered by free cash flow of late. Unless the cruise industry sees a sudden and sharp decline, I wouldn't worry at all about the viability of this payout.
Royal Caribbean will pay its next dividend on Oct. 11 to investors of record as of Sept. 22. The new distribution yields just under 2% on the current stock price.
Brady
As a Dividend Aristocrat -- one of only a few stocks that have raised their dividends at least once annually for a minimum of 25 years -- Brady (BRC 1.69%) has a lofty position to uphold. The workplace safety-goods specialist is maintaining that status with a slight 1% increase in this year's total payout to $0.83 per share; equating to nearly $0.21 per each quarterly distribution.
The almost imperceptible increase in the payout matched fiscal 2017's top-line performance, in which sales essentially flat-lined over the 2016 tally. On a happier note, cost savings helped the company post a substantial 19% rise in net profit.
The company's cash flow statement looks more impressive, with both operating and free cash flow rising at encouraging rates over the past few years. For fiscal 2017, Brady's FCF covered the total annual dividends paid by a ratio of over 3-to-1, while the payout ratio for the year was 44%.
This latter figure is -- save for a big spike in 2015 from a sharp drop in profitability -- more or less around the historical average for the company. Considering that, and Brady's tendency to grow its payout only incrementally, I'd consider this dividend to be very secure.
BRC Payout Ratio (Annual) data by YCharts
Brady's slightly raised dividend is to be dispensed on Oct. 31 to stockholders of record as of Oct. 10. It would yield a theoretical 2.3%.
