Over 250 publicly traded companies on U.S. exchanges will report quarterly earnings this month. Three industry giants have gotten a jump on the crowd and already announced dividend raises that will come into effect during the next quarterly cycle: American Express (AXP 0.07%), Qualcomm (QCOM 1.41%), and Colgate-Palmolive (CL 0.33%). The good news continues for fans of income stocks: investors still have time to take advantage of each dividend increase.
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1. American Express
First in line is American Express, the powerful and highly profitable payment card company. Starting with its next quarterly distribution, AmEx is spreading its recent success to shareholders in the form of a huge 20% dividend raise to $0.52 per share.
AmEx is motoring ahead thanks to two strong tailwinds: a generally rising global economy and the impending return of the travel sector. The latter in particular is historically an important revenue driver for the finance sector veteran. Last year, as cardholders itched to leave their homes -- and, in some cases, to get onto a plane or cruise ship -- AmEx's revenue grew substantially. All told, revenue rose by 17% at an annual rate last year and was exceeded by a 157% rise in net income.
With the tourism industry expecting a more large-scale recovery this year, that momentum should continue. AmEx is guiding for revenue growth between 18% and 20%, although per-share earnings are anticipated to drop a bit (by anywhere from 4% to 8%). Still, margins should remain high, as they usually are for the company). What's more, both top- and bottom-line growth should normalize after this year at low double-digit growth rates.
As mentioned before, American Express' latest dividend raise kicks in at the next quarterly payout, which is scheduled for May 10. The new dividend yield, which would be 1.1% at the most recent closing share price, will be available to stockholders of record as of April 8.
2. Qualcomm
Mobile chipmaker Qualcomm is also upping its payout. In March, the company's board of directors approved a 10% lift to the quarterly dividend, putting it at $0.75 per share.
Investors have lately had a bit of a rough ride with Qualcomm, as the stock price has declined on the back of a general sell-off in tech companies. In 2020, Qualcomm lost its spot as the top mobile chipmaker in the globe to Taiwainese rival MediaTek, and the worldwide chip shortage has also contributed to the company's woes.
Despite these setbacks, Qualcomm remains a powerful force in the industry and is leading the charge in the massive 5G upgrade cycle. Growth continues to be strong: first-quarter revenue rose by 30% year over year to $10.7 billion and GAAP net income surged 38% higher to almost $3.4 billion. That makes for a nearly 32% net margin, and that double-digit figure is typical for the company.
The mobile chipmaker believes that at the dawn of the 5G era, its addressable market has the potential to expand sevenfold over the next decade, ultimately hitting around $700 billion. Unless the company breaks character and makes a spectacular business mistake, now is prime time to take advantage of this massive opportunity.
Qualcomm hasn't yet set the record and payment dates of its upcoming dividend, though it will yield just under 2% at the current share price. The company is scheduled to release its second quarter of fiscal 2022 earnings after market hours on Wednesday, April 27.
3. Colgate-Palmolive
Consumer-goods mainstay and Dividend King Colgate-Palmolive has announced a 4% dividend raise to $0.47 per share for its quarterly payout. The company also launched a new share-repurchase program of up to $5 billion, replacing a 2018 initiative of the same size.
Although it describes itself as a "growth company," Colgate-Palmolive generally operates a mature, slow-growing and dependable business. Its brands are familiar to most American consumers and scores of people abroad. Among the many other products in its portfolio are Colgate toothpaste, Speed Stick deodorant, and Ajax household cleaner.
Over 2021, Colgate-Palmolive's top line rose an encouraging 6% to $17.4 billion. Meanwhile, the company squeezed out a 5% increase in "base" (i.e., non-GAAP or adjusted) net income to $3.21 per share, in line with its expectations.
But as the pandemic appears to wane, fewer folks are hoarding broom closet and medicine cabinet staples. Still, Colgate-Palmolive anticipates net sales rising by 1% to 4% year over year in 2022. Profitability is forecast to outpace this, thanks in part to a "global productivity initiative" launched in January. Colgate-Palmolive is expecting GAAP per-share earnings to rise at double-digit rates, though it didn't offer more specifics in the fourth quarter earnings call.
Colgate-Palmolive's new dividend will be handed out on May 13 to investors of record as of April 21 and would yield nearly 2.5%. The new buyback program has no fixed termination date.
