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3 Attractive Dividends That Are Going Up in June

By Demitri Kalogeropoulos - Jun 4, 2021 at 12:00PM

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PepsiCo is one of several top stocks set to pay investors more cash this month.

Investors have good reasons to love dividend stocks. Not only do they offer instant income potential, but these companies also tend to boast stable business models that can generate rising earnings through a wide range of selling environments.

With that in mind, let's look at a few attractive dividend stocks whose payouts are creeping up in June. That extra income boost is just one more reason to like PepsiCo (PEP -0.13%), Garmin (GRMN -1.98%), and Union Pacific (UNP -1.40%) stocks right now.

A young woman drinks soda from a straw.

Image source: Getty Images.

1. PepsiCo rewards investors

It's not obvious from its stock price chart, but PepsiCo just wrapped up a fantastic fiscal year. Organic sales growth nearly hit its booming 2019 level despite slumping soda demand. Rival Coca-Cola, which lacks Pepsi's diverse drink and snack portfolio, wasn't so lucky.

PepsiCo in April revealed steady sales growth to start fiscal 2021, with notable weaknesses including slowing gains and falling profitability. Yet the Dividend Aristocrat is shifting its cash return focus more toward dividend payments over stock buybacks this year. Its annual payout, which has risen for 49 consecutive years, is going up 5% this month to $4.30 per share. The weak stock price, meanwhile, means investors get a solid yield that's sitting at 2.75% as of early June.

2. Union Pacific delivers cash

Union Pacific's June dividend payment will be $1.07 per share, up from $0.97 per share last quarter. The railroad giant has an impressive payout streak, with 122 consecutive years under its belt.

The company noted a few challenges in its most recent earnings report as transportation volume ticked lower. But Union Pacific should benefit from faster economic growth and steadily rising prices through 2021 and beyond.

The rail giant pays out a bit more of its earnings as dividends than industry peers, even as it aggressively repurchases its stock. The combination of those trends, in addition to its attractive business model, should give many income investors something to like about owning this stock.

3. Garmin navigates to higher income

What Garmin lacks in a long dividend growth track record, it easily makes up for in operating strength. The GPS device giant recently concluded its sixth straight year of rising sales. That's a rare feat in most tech focused businesses, especially those that cater to shifting consumer electronic demands in wearable tech.

Profitability would have increased for a sixth consecutive year in 2020, too, except for a few temporary COVID-19 challenges early on. Despite those issues, Garmin met eager demand across its diverse portfolio that includes smart watches, boating navigation devices, and aviation platforms. Profits jumped in 2020 and continued rising through the first quarter of fiscal 2021.

Garmin's dividend in late June will be rising to $0.67 per share from $0.61 per share last year. Management announced that boost before first quarter results put it on track for another potentially strong fiscal year. As a result, income investors might get to see another year of booming earnings, and rising cash returns, if they hold Garmin stock through 2021 and beyond.

Demitri Kalogeropoulos has no position in any of the stocks mentioned. The Motley Fool recommends Garmin and Union Pacific. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Pepsico, Inc. Stock Quote
Pepsico, Inc.
$180.17 (-0.13%) $0.23
Union Pacific Corporation Stock Quote
Union Pacific Corporation
$238.52 (-1.40%) $-3.39
The Coca-Cola Company Stock Quote
The Coca-Cola Company
$65.17 (-0.08%) $0.05
Garmin Ltd. Stock Quote
Garmin Ltd.
$97.13 (-1.98%) $-1.96

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

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