If you want regular income, dividend growth stocks are great investments. These stocks raise their dividends, which helps balance inflation and increase your dividend income without any effort.
Walt Disney (DIS), Yum! Brands (YUM), and American Express (AXP) recently upped their payments by more than 10%. Here's a closer look at these firms' dividend performance and if you can expect more dividend rises.
1. Walt Disney This year, the entertainment and media powerhouse resumed its dividend. It suspended it during the COVID-19 pandemic, when its business was struggling. The firm behind Mickey Mouse and other famous brands is now paying dividends. The corporation has increased its dividend after recent positive results.
Disney raised its quarterly dividend 50% in February. The $0.45 quarterly dividend is its second since resuming payouts earlier this year. First payment was $0.30 in January. The stock's yield is 1.6% after the dividend increase. Company quarterly dividends were $0.88 in 2019.
Disney's revenue was steady at $23.5 billion in the last three months of 2023, but pre-tax profits jumped 62% to $2.9 billion as it cut spending. Disney is still striving to make its streaming business successful, is considering selling assets, and recently announced a $1.5 billion investment in Epic Games, so income investors should be careful.
With a lot of balls in the air and the dividend only recently reintroduced, I wouldn't assume this stock will maintain or increase its payout. With Disney's stock near its 52-week high, investors may want to wait and see.
2. Yum! Brands Yum! Even in tough times, Pizza Hut, Taco Bell, and KFC's parent firm can help investors profit from the economy's long-term growth.
Even if prices are rising, fast-food establishments are still affordable. This is shown by Yum! Brands' financial resilience. Sales rose 3% to little under $7.1 billion in 2023. Operating income increased 6% to $2.3 billion.
The corporation raised its quarterly dividend 11% in January. Stock holders receive a 2% dividend yield from the $0.67 payout. Yum! Brands raised its dividend 60% in five years. With a payout ratio of 43%, more rate hikes are possible. This dividend stock is cheap at 24 times earnings and might be held for the long term.
3. American Express Credit card company American Express serves wealthy customers, making it a safer stock buy than many others. Company revenue net of interest expense climbed 14% to $60.5 billion last year. Net income rose 11% to $8.4 billion.
American Express's board approved a 17% dividend hike this year. The stock's yield will rise to 1.3%, close to the S&P 500 average of 1.4%, with the $0.70 quarterly dividend. American Express' dividend rose 79% from $0.39 five years ago. The stock is cheap to hold at less than 20 times trailing earnings. American Express's 21% payout ratio and strong earnings growth suggest more dividend raises in the future.
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