What's better than a high-yield dividend? A high-yield dividend that keeps growing, of course. For those who want to start drawing from that rich revenue stream, I've found three habitual high-yield dividend payers that tend to hike their payouts in October and November. They're also likely to raise them to new all-time highs.
There's no universally accepted definition of high-yield dividend. So I think a suitable benchmark is a payout that yields more than twice the average dividend yield (1.2%) of S&P 500 index component stocks. A trio that makes the grade is Hormel (HRL 1.01%), McCormick (MKC 1.39%), and Brown-Forman (BF.A 1.10%) (BF.B 2.19%).
Image source: Getty Images.
1. Hormel
Not every American consumer is familiar with the Hormel name, but it's a good bet most people are aware of at least one of the company's products. It's a food company that owns the (in)famous Spam canned ham, Skippy peanut butter, Planters nuts, and a host of other classic comfort brands.
Hormel's goods are unavoidable at supermarkets and convenience stores, so the company sells in great volume. Its third-quarter net sales topped $3 billion and GAAP (generally accepted accounting principles) net income was nearly $184 million; both metrics were up on a year-over-year basis, although the company missed the average analyst estimate for profit.
Image source: Getty Images.
High volume and brisk sales mean robust free cash flow, the stream that has watered the dividend for many years (Hormel initiated its quarterly payout way back in 1928). Hormel is so reliable with dividend raises that it's a Dividend King, with a streak of 59 years of consecutive increases. Another habit is that these raises are typically declared in November.
Currently, Hormel's quarterly distribution is $0.29 per share, which yields a very meaty 4.8%.
NYSE: HRL
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2. McCormick
Elsewhere in the comestibles sector we have McCormick. The company sells spices and, like Hormel, occupies plenty of space on store shelves throughout this country.
It's hard to have tasty food without seasoning, so there's always demand for McCormick's products. Again similar to Hormel, the company has branched out, albeit more cautiously, acquiring specialty spice brands and condiments such as French's mustard.
It's a steady business if not necessarily an exciting one, with net sales rising at less than 3% year over year in the most recent quarter (to a bit over $1.7 billion). Net income, meanwhile, grew marginally to nearly $226 million. Those two line items topped analyst expectations although they didn't represent blow-them-out-of-the water beats.
But it's safe to say most McCormick investors aren't looking for flash. They're satisfied by steady performance with a pinch of growth, and sufficient free cash flow to keep the dividend funded. The company gets big check marks for both. It isn't quite a Dividend King but it's getting there; last November it declared a dividend increase for the 39th year in a row (by 7% to $0.45 per share).
Blended into McCormick's current share price, that quarterly payout yields 2.7%.
NYSE: MKC
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3. Brown-Forman
There's plenty of food and seasoning on our plate, so how about a drink now? Brown-Forman is a liquor producer of long standing, represented by its No. 1 product, Jack Daniel's whiskey. Outside of that, it has a collection of other alcoholic beverages and ready-made cocktails.
However, the company is selling into a market where many consumers are eschewing alcoholic drinks in favor of healthier products. The 2024 edition of an annual poll conducted by Gallup had the lowest percentage of respondents in history -- 54% -- reporting that they drank alcohol. And that's a survey that's been taken since 1939. Last year also represented the third straight year of declines.
Given that, it's not surprising that Brown-Forman's first quarter of fiscal 2026 (ended July 31) showed a decline in core fundamentals. Net sales dropped by 3% year over year to $951 million, while net income fell 13% to $195 million.
NYSE: BF.A
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Still, its net margin was relatively high, with profitability landing consistently far in the black on the bottom line. Cash flow is also plentiful, so the company's 41-year dividend raise streak is almost certain to be extended.
Brown-Forman most recently lifted its quarterly distribution in November 2024, with a 4% increase to just under $0.23 per share for both classes (A and B) of its common stock. That yields 3.2% for both.
