Dividend Growth Investor: Five Dividend Growth Companies Raising Dividends Last Week
Markets are making new highs. Corporate profits are also expanding. That’s allowing many companies to pay out dividends. For those that already pay a dividend, increasing the dividend is a signal as to the soundness of the business.
With so many dividend-paying stocks today, announcements of increased dividend payouts occur throughout the year. These companies should trend higher over time as increased payouts and increased earnings lead to higher share prices.
For instance, Fastenal Company (FAST) recently raised its dividend by 11.4 percent. It’s also the 26th consecutive increase in dividends for the distributor of industrial and construction supplies.
Over the past decade, Fastenal has increased its payout even faster, at a 13.3 percent annualized rate. The current dividend yield may sound low at 2.25 percent.
However, continual increases in the dividend in the low-double-digits will likely mean higher returns over time.
Another company raising dividends now is Enterprise Bancorp (EBTC). The company yields 3.3 percent, and has raised dividends at an annualized rate of 7.2 percent over the past decade.
The most recent dividend increase came to a 4.3 percent rise. While a bit lower than average, many smaller banks reduced or eliminated dividends during last year’s banking crisis.
Consistently increasing dividend payouts provides a signal to investors as to the health of a company, and buying these companies when shares are beaten down can provide strong market returns over time.
To see the full list of companies increasing dividends now, click here.