For the most part, the 30 stocks in the Dow Jones Industrials (DJINDICES:^DJI) have a good track record in treating dividend investors right. All 30 Dow components pay a dividend, and the vast bulk of those companies are in the habit of giving their shareholders regular dividend increases on an annual basis.
But a few laggards within the Dow haven't lived up to that standard of dividend excellence. Let's take a look at the four stocks within the Dow that haven't increased their payouts in over a year.
Alcoa (NYSE:AA) has gone the longest without a dividend increase, with its last payout raise coming in January 2007. In the aftermath of the financial crisis, the aluminum giant had to cut its dividend by more than 80%, and ever since, Alcoa hasn't managed to improve on its $0.03 per share quarterly payout. Even with that modest dividend that yields 1.6%, Alcoa's payout ratio approaches 100%. Moreover, the aluminum industry remains tenuous right now, as the threat of changing warehouse regulations threatens to unleash new supply in an environment that's already struggling from low prices. Investors shouldn't expect a dividend raise anytime soon.
Bank of America (NYSE:BAC) has the smallest dividend payout in the Dow, yielding just 0.3% with its penny-per-share quarterly payout. Its last dividend increase came in September 2007, and the bank subsequently slashed its distribution twice in late 2008 and early 2009 in order to conserve money and comply with TARP bailout requirements. With the stock having passed the Fed's stress tests earlier this year, investors expected that a long-awaited dividend increase might be forthcoming, but the company decided instead to implement a buyback and save a future dividend hike until after the bank's capital condition had improved further.
United Technologies (NYSE:UTX) hasn't gone nearly as long since raising its dividend, with its last increase having come in June 2012. The company has a long history of boosting its payout on an unusual schedule of every five quarters, having done so since 2003. By that measure, the next increase should come next month, with a potential raise to somewhere around $0.59 or $0.60 per share potentially raising the stock's yield to about 2.3%. With the company having taken on a sizable financial burden in buying out Goodrich last year, though, it's possible that United Tech will keep its dividend unchanged in order to reduce its debt more quickly.
Finally, Intel (NASDAQ:INTC) hasn't had a dividend increase since August 2012, having paid the same dividend for five straight quarters. Unlike United Tech, Intel has tended to stick to a four-quarter schedule for its payout hikes, although it has occasionally gone for longer periods without a dividend increase. Throughout much of 2008 and 2009, for instance, the company kept its payout unchanged. Given the challenges that Intel has had in expanding its PC dominance to cover the growing mobile market, it's possible that Intel is saving its considerable cash hoard for a major strategic move.
Be smart about dividends
Every company wants to grow, but not every stock can grow its dividend every year. These stocks have gone through tough times, but if they recover fully, they could get back on the dividend-growth bandwagon soon.
Fool contributor Dan Caplinger owns warrants on Bank of America. You can follow him on Twitter: @DanCaplinger. The Motley Fool recommends Bank of America and Intel and owns shares of Bank of America and Intel. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.