Ahh, that's more like it. After only a few tentative dividend raises in the inaugural days of the new year, more firms are opening their wallets to better reward their shareholders. Several stocks enacted hikes recently, and more increases are on the near horizon.
It goes without saying that this is a boon for shareholders, and not only because they're getting a bigger payout. When a firm boosts its distribution, its stock price also tends to see a lift thanks to that additional return.
Without further ado, the three recent dividend enhancers I've chosen to highlight are:
The big automaker is rolling into 2015 in style, cranking its quarterly dividend up to $0.15 per share, 20% higher than its predecessor. Since relaunching its dividend in 2012 after a five-plus-year hiatus, the company has lifted it from $0.05 to the present level.
The timing of the raise comes on the back of good recent news for Ford. Its December sales tally came in at nearly 220,700 vehicles, its best showing for that month since 2005.
However, this doesn't mask the fact that in terms of financials, the company's top and bottom lines have stumbled over the past few quarters, with the Q3 figures both coming in below those of Q3 2013. Europe in particular remains a challenging market for the firm.
Nevertheless, it's clear that the dividend is an important part of the company's efforts to keep its shareholders happy. It's got the finances to do so, being cash flow positive to the tune of almost $3.5 billion at the end of Q3. That's well above what it's shelling out in dividends. In light of that, at the moment the firm's new payout looks safe, sustainable, and a good candidate for future raises.
Ford's accelerated dividend is to be distributed on March 2 to shareholders of record as of Jan. 30.
Nordic American Tankers (NYSE:NAT)
Now this was a meaty rise this month: Nordic American Tankers lifted its quarterly dividend a muscular 57%, to $0.22 per share from the previous $0.14.
The firm is benefiting from the decline in the oil prices in a roundabout way. Many traders in the commodity, apparently, believe the current level is unsustainably low, and as a result have bid up the prices of oil futures contracts. This has led to many holders hiring out tankers for months at a stretch in order to basically store that (currently cheap) black gold until the spot price climbs significantly and they can sell for a decent profit.
Like the commodity it depends on, though, the fortunes of the company can be very volatile. Wild swings in revenue and profit are not unusual.
Similarly, its payout tends to bounce around a lot. Another source of volatility is the number of shares outstanding, as the company often floats new issues to raise funding, moves that have diluted existing shareholders.
Nordic American Tankers, then, is probably an income investment only for those who don't mind a stock that -- almost literally -- operates in very choppy waters.
Nordic American Tankers will pay its new dividend on Feb. 9 to stockholders of record as of Jan. 22.
This home security specialist is opening the door a bit wider for its dividend to creep outside. The company raised its quarterly distribution by 5% to $0.21 per share earlier this month.
But other numbers aren't going up. Fiscal 2014 saw only a 3% rise in top line (to $3.4 billion), while operating income dropped 10% and net profit saw a more precipitous fall of 28% (to $659 million and $304 million, respectively).
The future's looking a bit cloudy at the moment. Competitors like Time Warner Cable are making a play at the potentially lucrative household automation segment, challenging the prospects of ADT's Pulse service. And, by extension, the company's fundamentals and its cash position.
It has enough free cash flow to fund its dividend at the moment, but that might not be a sure thing going forward -- strong headwinds could be coming, and the company's payout ratio (the percentage of earnings it distributes as dividends) has been rising notably.
ADT's upcoming dividend will be handed out on Feb. 18 to shareholders of record as of Jan. 28.ADT's upcoming dividend will be handed out on Feb. 18 to shareholders of record as of Jan. 28.