One attractive feature of dividend increases is that they're usually announced well in advance of the day the enhanced payout is distributed. Savvy income investors, then, wisely keep track of companies making dividend payments to take early advantage of upcoming hikes.
With that firmly in mind, here are a pair of dividend hikes from well-known blue chip stocks that investors can consider now. Read on for details about the recent bumps from defense industry mainstay Lockheed Martin (LMT 0.40%) and ubiquitous coffee slinger Starbucks (SBUX 1.20%).
1. Lockheed Martin
Of the two stocks, by far the more dramatic dividend raise belongs to Lockheed Martin. In mid-October, its board of directors authorized a 5% hike to the company's quarterly payout to $3.45 per share. The company wasn't shy to mention that this makes 2025 the 23rd year in a row it has hiked its payout.
On top of this, Lockheed Martin also added $2 billion in authorization to its share repurchase program. It now has a dizzying $9.1 billion, at maximum, to spend on such buys. The initiative does not have an end date.
Image source: Getty Images.
The reveal of the dividend raise and the amped-up stock buyback program came less than two weeks in advance of the defense company's scheduled third-quarter earnings release. Analysts tracking the stock are modeling an 8% year-over-year increase in revenue, to more than $18.5 billion, although they believe per-share earnings will dip by 7% to $6.39.
Recently, Lockheed Martin has had a mixed record of bottom-line beats and whiffs. Yet we live in a time of conflict, so as a leader in its industry, the company should continue to be prosperous.
The one wild card just now is the federal government shutdown. Fortunately for the company, it managed to secure a massive, $24 billion-plus U.S. Air Force order for 296 of its state-of-the-art F-35 fighter jets before the lights went out.
Lockheed Martin's raised dividend is to be paid on Dec. 30 to investors of record as of Dec. 1. At the most recent closing stock price, it would yield 2.7%.
2. Starbucks
On the less generous end of the scale, we have the recent dividend raise from java king Starbucks. On the first day of October, the company said it was bumping its quarterly payout $0.01 (or 0.2%) higher to $0.62 per share.
That might not be a huge increase, but it does keep Starbucks' dividend policy consistent. After initiating its dividend near the beginning of 2010, the company has raised it every year.
Image source: Starbucks.
The modest hike it just declared is fitting for its present situation. The company's performance hasn't been impressive in quite some time; in each of the three reported quarters for its fiscal 2025, it saw significant year-over-year drops in GAAP net income. In one of the trio, this once reliable revenue grower also saw a dip on the top line.
At times, it feels like Starbucks is in retreat. Near the end of September, it announced it was cutting roughly 900 corporate jobs and shuttering what will amount to hundreds of its coffee shops in North America. These days, it's not unusual to see a once-thriving Starbucks location boarded up and ready for the building's next occupant.
Of the company's efforts to right the ship, headed by star CEO Brian Niccol (formerly the successful leader of high flying fast casual restaurant operator Chipotle Mexican Grill) Barron's wrote in the headline of a recent article that the company "still hasn't figured out its turnaround." I'd be inclined to agree, and until we start seeing glimpses of better performance, I'd avoid Starbucks stock.
The upcoming Starbucks dividend will be handed out on Nov. 28 to stockholders of record as of Nov. 14. Its yield stands at just over 3%.
