The dividend raise locomotive has to slow down at some point, but that point isn't now. Last week a big pack of companies enhanced their payouts. This is a boon to shareholders because not only does a dividend hike put more cash in their wallets, it can and often does boost the share price when the good news spreads.
To that end, here are the chosen three raisers from the last few days:
Dunkin' Brands (Nasdaq: DNKN)
How about a dividend lift to go with your donut and coffee? The operator of Dunkin' Donuts (plus Baskin-Robbins ice cream parlors) added 15% more frosting to its quarterly distribution for a total of $0.265 per share.
That good news came after a discouraging note or two about the company's Q4 and fiscal 2014 results, which were handed down last week. Although net profit saw a chunky increase of 25% and beat estimates, same-store sales growth was relatively weak (up 1.4% on a year-over-year basis, compared to Q4 2013's 3.5%). And last month, Dunkin' trimmed its per-share earnings forecast for fiscal 2015, from a range of $1.88 to $1.91 to $1.83 to $1.87.
DNKN Net Income (Quarterly) data by YCharts
On the whole, though, Dunkin' Brands continues to grow and improve said earnings. As far as its payout is concerned, the company throws off more than enough cash to cover shareholder distributions. It likes to raise its dividend at the beginning of every year, and barring any catastrophes we can assume it'll continue doing so for now.
Dunkin' Brands' new dividend is to be paid on March 18 to shareholders of record as of March 9.
Harley-Davidson (NYSE: HOG)
This famous motorcycle maker has a long history of paying quarterly dividends, which it's extending with the declaration of a $0.31 per share payout. That's 13% higher than the preceding amount.
2015 might still be fresh, but it's already been an eventful year for Harley-Davidson. In addition to the dividend lift it named a new CEO (Matt Levatich), and reported its fiscal 2014 results.
These took a hit because of the strong dollar (around one-third of its sales come from abroad). Although this hurt profitability, Harley-Davidson still managed to crank its bottom line 15% higher on an annual basis to $845 million ($3.88 per diluted share) for the fiscal year.
By focusing with the intensity of a biker on its core business of selling motorcycles, the financing thereof, and associated merchandise, the company has posted good and generally improving net margins over the past few years. Over that time, bottom line has developed at a similar trajectory.
HOG Net Income (TTM) data by YCharts
The bike maker might still have an outlaw image in some minds, but in terms of business it's managing its assets well and turning a meaty profit. And to me, Harley-Davidson's dividend looks pretty secure (at a pretty conservative cash dividend payout ratio of 31% on a trailing-12 month basis), so a moderate increase looks very doable.
The company's upcoming distribution will be handed out on March 6 to stockholders of record as of Feb. 18.
Western Digital (Nasdaq: WDC)
Thanks to the preponderance of tablets and smartphones, many believe that the age of the PC is over. This hard drive manufacturer would beg to differ, and it's putting its shareholder payout where its mouth is. It's declared a 25% kick to its quarterly dividend, lifting it to an even $0.50 per share.
Western Digital surprised itself with its most recent set of quarterly figures. Although revenue was down slightly on a year-over-year basis (landing at just under $3.9 billion), adjusted net profit of $539 million -- $2.26 per share -- well exceeded the firm's own guidance of $2.00 to $2.10 per share.
Nevertheless, it's hard to ignore the technological shift away from the old PC/laptop regime and toward smaller and more portable form factors. Western Digital has more than enough dosh in the bank to cover its dividend (which has more than doubled since the company started paying one), so perhaps the distribution is safe for now ... but the outlook for its medium-term and long futures looks cloudier to me.
WDC Dividend data by YCharts
Western Digital's upcoming dividend is to be paid on April 16 to shareholders of record as of April 3.
