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Stock Market Wrap-Up: These 2 Stocks Hiked Their Dividends Today

By Dan Caplinger – Apr 21, 2020 at 4:06PM

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Find out which one gave investors a raise of almost 80%.

The stock market dropped on Tuesday, with market participants remaining nervous about the major disruptions in crude oil trading. Oil futures regained ground to finish in positive territory after Monday's unprecedented drop, but supply-and-demand imbalances look poised to persist for weeks or even months until producers can adjust their production decisions and industrial energy users are able to reopen operations. The Dow Jones Industrial Average (^DJI -0.07%), S&P 500 (^GSPC -0.17%), and Nasdaq Composite (^IXIC -0.40%) were all down in the 2.5% to 3.5% range, with the largest losses for the tech-heavy Nasdaq.

Today's stock market

Index

Percentage Change (Decline)

Point Change

Dow

(2.67%)

(632)

S&P 500

(3.07%)

(87)

Nasdaq Composite

(3.48%)

(298)

Data source: Yahoo! Finance.

Yet amid the carnage, there was good news for investors in a couple of stocks. Dividend increases have been few and far between lately, with many companies choosing instead to conserve cash in order to strengthen their balance sheets. For Newmont (NEM -1.65%) and Qualcomm (QCOM 1.73%), however, rewarding shareholders took top priority -- even though shareholders didn't seem to appreciate the generosity all that much.

Newmont shines

Shares of Newmont were down about half a percent Tuesday. The gold mining giant has seen a lot of success lately, and shareholders got to benefit from strong conditions in the gold market.

Newmont boosted its quarterly dividend to $0.25 per share on Tuesday, confirming its previous intention earlier this year to do so. That represented a 79% increase from its previous payment of $0.14 per share. Given the stress that the mining industry has faced in recent years, the size of the move seemed almost too generous in some investors' eyes.

Calculator, glasses, cash, and a notebook with a blue pen and the word Dividends written in it.

Image source: Getty Images.

For a while, Newmont had an unusual dividend policy that tied payout increases to the price of gold. Later, Newmont gave up on that strategy, but it still looks at factors like cash needs and financial condition in making decisions.

Newmont's move makes sense in light of the run-up in gold prices recently. Some might have worried that the coronavirus pandemic would make the gold miner change its mind since announcing its intent three months ago, but shareholders will nevertheless get the higher payout, at least this quarter.

A smaller boost for Qualcomm

Dividend increases of almost 80% are far from commonplace. More typical is what tech leader Qualcomm did, delivering a more modest payout boost of around 5% today. Even with the dividend hike, shares were down more than 3% Tuesday.

Qualcomm announced that it would pay a $0.65 per share dividend for the quarter. That's up from the $0.62 per share that it paid in the most recent period, and it pushed the stock's dividend yield up to 3.6%.

Investors have had mixed views on Qualcomm for a while. On one hand, the potential of 5G network upgrades to bring in new business gives the stock an undeniable appeal. However, Qualcomm's exposure to China makes it vulnerable if global trade relations fail to recover following the worst of the pandemic.

The big question remains whether China's economy will recover strongly as it begins to emerge from the effects of COVID-19. If it does, then Qualcomm is in an excellent position to benefit from it by taking advantage of strong demand for 5G-related products.

Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool owns shares of Qualcomm. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Qualcomm Stock Quote
Qualcomm
QCOM
$124.49 (1.73%) $2.12
Newmont Corporation Stock Quote
Newmont Corporation
NEM
$43.80 (-1.65%) $0.73
Dow Jones Industrial Average (Price Return) Stock Quote
Dow Jones Industrial Average (Price Return)
^DJI
$30,295.77 (-0.07%) $-20.55
S&P 500 Index - Price Return (USD) Stock Quote
S&P 500 Index - Price Return (USD)
^GSPC
$3,784.31 (-0.17%) $-6.62
NASDAQ Composite Index (Price Return) Stock Quote
NASDAQ Composite Index (Price Return)
^IXIC
$11,131.48 (-0.40%) $-44.93

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

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