Please ensure Javascript is enabled for purposes of website accessibility

2 Attractive Dividend Stocks Whose Dividends Could Double

By Steve Symington - Updated Oct 3, 2019 at 4:50PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

These promising tech leaders are planning to significantly increase their quarterly payouts.

Buying and holding high-quality dividend stocks is one of the best ways for any investor to consistently beat the market over the long term. But while many people focus primarily on stocks with sky-high annual dividend yields, even more important is understanding how each company plans to adjust its future payouts.

Of course, that includes not only being aware of which dividend stocks are at risk of suspending their payouts, but also knowing which companies stand the highest chance of substantially increasing their dividends over time.

Let's focus on the more optimistic side of that equation. Here are two promising dividend stocks whose dividends could double going forward.

Hand stacking successively taller stacks of gold coins.


The (dividend) future is bright for Universal Display

With its $0.10-per-share quarterly payout equating to an annual yield of just 0.25% at today's share prices, Universal Display (OLED 5.34%) isn't exactly a Dividend Aristocrat. Rather, bullish investors rightly place their focus on the massive growth prospects for Universal Display's flagship organic light emitting diode (OLED) technology, whether it comes from next-generation flexible smartphone displays, rollable and semi-transparent televisions, or novel OLED lighting concepts down the road.

But we should also keep in mind Universal Display has already more than tripled its dividend (albeit from a tiny base) since initiating its payout at $0.03 per share in early 2017. To be sure, management called it a "good place to start" at the time, promising to continue ramping the dividend as Universal Display's business grows.

And grow it has: Adjusted revenue last quarter soared more than 60% year over year, while adjusted net income nearly doubled in the process. Though those results were aided by some pulled-forward orders from Chinese manufacturers amid the current trade war -- a region in which some bearish investors previously feared Universal Display would have trouble imposing its fortress-like OLED patent portfolio -- Universal Display leadership insists the OLED industry as a whole remains in a "very early state." 

For investors willing to buy now and collect Universal Display's modest dividend while that growth story plays out, I think much larger quarterly checks will be in the mail in the coming years.

A crystal-clear history of increasing payouts

Meanwhile, investors in glass technologist Corning (GLW -1.89%) are currently enjoying a $0.20-per-share payout that yields roughly 2.9% annually at today's prices. Similar to Universal Display, Corning has already doubled its payout from $0.10 per share in 2014 -- namely through a steady series of increases that can be credited to the success of the company's (soon-to-be-concluded) four-year strategy and capital-allocation plan, which it put into place in late 2015. Under that plan, Corning returned more than $12.5 billion to shareholders through dividends and stock repurchases, while simultaneously investing $11 billion toward driving future growth.

But Corning isn't done yet. A few months ago, the company unveiled its new 2020-2023 Strategy and Growth Framework, through which it plans to return another $8 billion to $10 billion to shareholders via dividends and repurchases even as it grows earnings per share by 12% to 15% annually.

That doesn't mean Corning's goals will be easy to achieve. Just last month, the company reduced financial guidance for its two largest segments -- Display Technologies and Optical Communications -- saying customers are purchasing TV panels and implementing optical fiber deployments more cautiously in the face of increasing macroeconomic uncertainty.

Over the longer term, however, each of Corning's businesses remains attractively positioned to capture an outsize slice of their respective markets when today's macro uncertainty wanes. And I think shareholders who buy and hold Corning stock will be rewarded for their patience as Corning's dividend continues to climb.

Steve Symington owns shares of Universal Display. The Motley Fool owns shares of and recommends Universal Display. The Motley Fool recommends Corning. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Corning Incorporated Stock Quote
Corning Incorporated
$35.80 (-1.89%) $0.69
Universal Display Corporation Stock Quote
Universal Display Corporation
$125.41 (5.34%) $6.36

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/07/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.