What do investors have to be thankful for this year? Nicely performing stock markets, for one. And, of course, another shareholder favorites: dividend raises.
These not only put extra money directly into the lucky investor's pocket, but also often improve the stock price, as the market is willing to pay that much more for the extra payout. Companies that improve their long-term fundamentals typically have extra resources to add to their distribution over time.
Following a recent pattern, last week saw several noted companies hike their distributions in time for Thanksgiving. Stockholders of these three firms in particular will have a good holiday as they tuck into their turkey and stuffing.
Nike (NKE 0.69%)
The high-profile sports apparel king knows how to engender gratitude. It likes to raise its quarterly dividend once per year around this time, having now done so for 13 years in a row. Its new payout of $0.28 is a substantial 17% improvement over its predecessor.
Nike has the fundamentals to sustain those lifts. In its most recently reported quarter, the company posted a solid 15% year-over-year increase in revenue and a 23% boost to the bottom line, despite a 23% rise in marketing costs, which include star athlete endorsements, to $897 million.
NKE Revenue (Quarterly) data by YCharts.
And Nike's generating more than enough cash to cover the dividends. Its cash from operations amounted to $588 million during the quarter -- well above the $209 million it spent on distributions.
So despite a few recent hiccups -- namely, the abrupt but necessary cancellations of endorsement deals with disgraced athletes Oscar Pistorius and Adrian Peterson -- Nike's business looks solid, and its dividend safe. No one should worry about the immediate future of its payout.
Nike's bulked-up distribution is to be paid on Jan. 5 to shareholders of record as of Dec. 15.
La-Z-Boy (LZB -1.34%)
In a way, this comfy chair manufacturer's business is the polar opposite of Nike's: It caters to the crowd that would rather relax and watch sports on TV than participate in them directly.
As far as La-Z-Boy's payout is concerned, though, the company is plenty active. It has just declared a fresh quarterly dividend of $0.08. Although that's only $0.02 higher than its latest distribution, in percentage terms, that amounts to a hefty 33%.
Concurrent with the happy dividend news, the company released its fiscal Q2 2015 results. These showed healthy increases in revenue and net profit, though in terms of analyst expectations this was a case of good news and bad news -- the top line missed the consensus estimate, while earnings per share beat it by several cents.
At the moment, operating cash significantly exceeds La-Z-Boy's spend on dividends ($31.8 million compared to $6.3 million). However, the company's capital expenditures exceeded its operating cash flow, and its future is a little fuzzy, given that it involves the cessation of its domestic wood furniture production and the opening of more stores.
LZB Free Cash Flow (TTM) data by YCharts.
As a result, the fate of La-Z-Boy's dividend feels a bit uncertain, so investors should be cautious when considering the stock on that basis.
La-Z-Boy's new dividend is to be handed out on Dec. 10 to shareholders of record as of Nov. 28.
Johnson Controls (JCI -1.00%)
This consistently profitable auto parts maker is also a habitual dividend-raiser. When adjusted for stock splits, its quarterly payout has risen substantially over the years, doubling from its level at the end of 2010. Last week Johnson Controls enacted an 18% hike from $0.22 per share to $0.26.
This came several weeks after the sturdy company posted Q4 results that were more or less in line with expectations, with revenue ticking up on a year-over-year basis and net profit advancing substantially to $309 million from Q4 2013's $105 million. One big factor in the latter's growth was the big spend on restructuring and impairment in the 2013 quarter, which came in at $730 million as opposed to this quarter's $162 million.
Regardless, the results were encouraging if not spectacular. And they're strong enough to keep the current dividend afloat and then some: Cash and equivalents stood at $409 million at the end of Q4, well over what Johnson Controls handed out in dividends.
JCI Total Dividends Paid (Quarterly) data by YCharts.
This company's payout is clearly important to it, and given that it has plenty of cash to fund it, it'll probably keep that dividend motoring higher with more increases down the road.
Johnson Controls' upcoming distribution will be paid on Jan. 5 to shareholders of record as of Dec. 12.
