{"id":33015,"date":"2023-07-08T08:51:30","date_gmt":"2023-07-08T12:51:30","guid":{"rendered":"https:\/\/ifintechworld.com\/news\/dividend-hike-alert-these-3-top-stocks-are-raising-payouts\/"},"modified":"2023-07-08T08:51:32","modified_gmt":"2023-07-08T12:51:32","slug":"dividend-hike-alert-these-3-top-stocks-are-raising-payouts","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=33015","title":{"rendered":"Dividend Hike Alert: These 3 Top Stocks Are Raising Payouts"},"content":{"rendered":"<div data-test-id=\"content-container\">\n<p><figure class=\"getty-figure\" data-type=\"getty-image\"><picture>  <\/picture><figcaption> <\/figcaption><\/figure>\n<\/p>\n<p>Every investor likes a good dividend hike. When you buy a stock thinking it has a 5% yield, and you hear about a 10% dividend hike taking the yield to 5.5%, you\u2019re likely to get excited. This year, there are plenty of dividend hikes<span class=\"paywall-full-content invisible\"> occurring\u2013particularly in the banking sector. Despite all the pandemonium in the financial industry this year, the larger banks are still confident enough to hike their payouts. In this article, I will explore three quality stocks hiking their dividends\u2013two banks and one food company.<\/span><\/p>\n<h2 class=\"paywall-full-content invisible\">Bank of America<\/h2>\n<p class=\"paywall-full-content invisible\"><strong>Bank of America<\/strong> (BAC) announced Wednesday that it would be hiking its dividend 9%, from $0.22 to $0.24. Bank of America\u2019s yield already increased this year as a result of its stock price falling: it currently yields 3.11%. With a $0.24 quarterly dividend, it will<span class=\"paywall-full-content invisible no-summary-bullets\"> yield 3.36% (assuming the stock price doesn\u2019t change).<\/span><\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">Bank of America has delivered respectable results this year. In its most recent quarter, its revenue increased 13%, its earnings increased 15%, and its pre-tax pre-provision income increased 27%. A solid showing. Also, the release beat analyst expectations.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">Bank of America has done a lot of growing in the last five years. According to Seeking Alpha Quant, its 5 year CAGR growth rates in revenue, earnings and assets are:<\/p>\n<ul class=\"paywall-full-content invisible no-summary-bullets\">\n<li>\n<p>Revenue: 2.2%.<\/p>\n<\/li>\n<li>\n<p>Earnings: 14%.<\/p>\n<\/li>\n<li>\n<p>Assets: 6.5%.<\/p>\n<\/li>\n<\/ul>\n<p class=\"paywall-full-content invisible no-summary-bullets\">Pretty respectable growth. Despite it, the stock is fairly cheap, trading at 8.5 times earnings, 2.4 times sales and 0.9 times book value. A dividend growth stock that could do great things in the year ahead.<\/p>\n<h2 class=\"paywall-full-content invisible no-summary-bullets\">JPMorgan<\/h2>\n<p class=\"paywall-full-content invisible no-summary-bullets\">Next up, we\u2019ve got <strong>JPMorgan Chase<\/strong> (JPM). This is a company that recently announced it would hike its dividend 5% in the coming quarter. The hike is not as big as BAC\u2019s, though JPM\u2019s earnings growth was actually much better last quarter, coming in at 52%.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">JPMorgan has been more active in pursuing growth this year than Bank of America has. During the Spring banking crisis, JPMorgan eagerly bought up First Republic\u2019s assets, netting an instant $2.6 billion equity gain in the process. It even got the government to insure 50% of any potential losses. The deal was a big take for JPMorgan, and part of why the stock is rising this year when most banks are down.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">The natural consequence of this is that JPM is not as cheap as other banks. At today\u2019s prices, it trades at 10.5 times earnings, 3.3 times sales and 1.5 times book value. It\u2019s a lot more expensive than Bank of America, and it scores a D+ on valuation according to Seeking Alpha Quant. Nevertheless, it\u2019s a highly profitable dividend grower with another dividend hike right around the corner.<\/p>\n<h2 class=\"paywall-full-content invisible no-summary-bullets\">Unilever<\/h2>\n<p class=\"paywall-full-content invisible no-summary-bullets\"><strong>Unilever PLC<\/strong> (UL) announced on the 4th of July that it would be raising its dividend from $2.34 to $2.35, a 2.94% increase. Unilever only yields 1.21%, so it\u2019s not exactly a \u201chigh yield\u201d name. Nevertheless, the hike is a mild vote of confidence from management.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">What makes Unilever a good stock, apart from the recent hike?<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">First off, it\u2019s a classic Warren Buffett-like \u201cfood brand\u201d stock, which owns recognizable brands like Ben &amp; Jerry\u2019s, Dove, Hellman\u2019s, and Knorr. A quick trip to the grocery store shows that these brands have pricing power, as they are usually more expensive than the non-branded equivalents. Hellman\u2019s, for example, is consistently more expensive than store brand mayonnaise.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">Second, the stock is fairly cheap. At today\u2019s prices it trades at 17.7 times earnings, 2 times sales, 6.4 times book value, and 16.6 times operating cash flow.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">Third and finally, the company\u2019s growth has been excellent in this period of high inflation. Food companies are among the main beneficiaries of this high inflation environment, and Unilever is no exception. In the trailing 12-month period, its revenue grew 14.5%, EPS grew 29%, and levered FCF grew 60.5%. A solid showing already, and with its heavy emerging markets exposure, UL may well continue growing into the future.<\/p>\n<h2 class=\"paywall-full-content invisible no-summary-bullets\">The Bottom Line<\/h2>\n<p class=\"paywall-full-content invisible no-summary-bullets\">The bottom line on dividend hikes is this:<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">They signal that management believes their company\u2019s future is better than its recent past.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">If that\u2019s the case, then the future could be bright for large banks and consumer staples. Both of these sectors are seeing dividend hikes this year, as their earnings are growing and their margins are healthy.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">Of course, all of this could change. For banks, especially, the inverted yield curve could start causing problems. Banks borrow on the short end of the yield curve and lend on the long, which means they should see margins squeezed when short term yields are higher than long. We haven\u2019t seen that happen to the big banks yet, though some smaller banks failed when depositors pulled out their money to seek more yield elsewhere. Risks abound, but banks that practice good risk management should continue to thrive in the year ahead.<\/p>\n<p class=\"paywall-full-content invisible no-summary-bullets\">The big takeaway here is that company fundamentals are the biggest part of any investment thesis. Market commentators have been saying since the start of 2022 that we will have a recession any day now. Maybe we will, maybe we won\u2019t, but big banks and consumer staples are still doing well. Those who invest in these sectors will see rising dividends in the months ahead.<\/p>\n<\/div>\n<p>Read the full article <a href=\"https:\/\/seekingalpha.com\/article\/4615889-dividend-hike-alert-3-top-stocks-raising-payouts?source=feed_all_articles\" target=\"_blank\" rel=\"noopener\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Every investor likes a good dividend hike. When you buy a stock thinking it has a 5% yield, and you hear about a 10% dividend hike taking the yield to 5.5%, you\u2019re likely to get excited. This year, there are plenty of dividend hikes occurring\u2013particularly in the banking sector. Despite all the pandemonium in the [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":33016,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"gallery","meta":{"footnotes":""},"categories":[236],"tags":[83],"class_list":["post-33015","post","type-post","status-publish","format-gallery","has-post-thumbnail","hentry","category-news","tag-featured","post_format-post-format-gallery"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Dividend Hike Alert: These 3 Top Stocks Are Raising Payouts | iFintechWorld<\/title>\n<meta name=\"description\" content=\"Every investor likes a good dividend hike. 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