If you’re seeking remarkable high-dividend gains, it would be worthwhile to check out the contenders for our top dividend stocks for August 2015.
With this many uncertainties surrounding the equity markets, I doubt that many companies will be able to increase their dividends for a while. Under these circumstances, many firms intend to retain their cash-in-hand rather than paying it to their shareholders.
I identified these five dividend stocks that are likely to deliver substantial dividend increases in the coming months. I picked these stocks because they pay out half of their earnings or less, indicating that there is still room to increase the dividends.
Stocks to Watch:
Wal-Mart Stores Inc. (NYSE/WMT)
Dividend yield: 2.7%
Payout Ratio: 39%
Wal-Mart Stores Inc. (NYSE/WMT) has a current yield of 2.7% or $1.96 per share. For the last 42 years, the company has grown its dividends.
Wal-Mart’s competitive advantage comes from its remarkable economic scale which resulted in enormous operation efficiency. The company uses its bargain over suppliers to lower its cost and then passes lower prices compared to other competitors to customers.
Wal-Mart’s simple business plan is its strength. The company has a very friendly relationship with its shareholders. Routinely, the company has repurchased about 2.8% of shares outstanding each year.
Wells Fargo & Company (NYSE/WFC)
Dividend yield: 2.6%
Payout ratio: 35%
Wells Fargo & Company (NYSE/WFC) is reportedly mentioned by analysts to be one of the safest banks in the world. Back in 2008, when most banks lost value significantly, Wells’ stocks gained about two percent.
With $1.7 trillion in assets, Wells Fargo is the America’s fourth-largest banking company. Wells has raised its dividend each year since 2011 and currently has a 2.6% yield. With the low below 50% payout ratio and improving outlook for the banking industry, the company will likely increase its payout ratio this year.
Just a reminder, the Federal Reserve is expected to raise interest rates later this year. A rise in long-term rates would allow banks to charge more for loans and mortgages and increase the spread between their loans and their low rate deposits. That could translate into more dividends for shareholders.
The Home Depot, Inc. (NYSE/HD)
Dividend yield: 2.10%
Payout ratio: 41%
As the housing industry seems to be recovering from their bottom in 2012, giant retailer Home Depot, Inc. (NYSE/HD) is likely to benefit.
According to company’s latest earnings, store sales for the first quarter of 2015 increased by 6.1% compared to the same period last year. Revenues in the first quarter of 2015 also climbed by the same number compared to the same period last year.
The world’s largest home improvement retailer raised its quarterly dividends by 26% in 2014 to $0.59 per share. The latest increase in dividends marks the sixth increase over the past few years. In February, Home Depot raised its dividend by 21%, and it will likely deliver another double-digit percentage hike next year.
Honeywell International Inc. (NYSE/HON)
Dividend yield: 2.1%
Payout ratio: 36%
The company makes a range of products, from home thermostats to nylon resins for food packaging. For the last 45 years, the company has grown its dividends. Honeywell International Inc. (NYSE/HON) has a current yield of 2.1% or $0.52 per share.
Considering shareholders are already enjoying the 2.1% dividend yield, the very well diversified manufacturer plans to continue to grow its dividends. According to the second-quarter earnings report, the company’s sales rose three percent in the second quarter and marks another quarter of double-digit earnings growth when normalized for tax. The company also increased its outlook for its full-year 2015 guidance.
The Boeing Company (NYSE/BA)
Dividend yield: 2.50%
Payout ratio: 45%
Orders for advanced commercial aircraft from Boeing such as the Dreamliner 787 continue to rise. According to the company’s second-quarter earnings, revenue increased 11% to $24.5 billion on record commercial deliveries. The company paid $600 million in dividends in the quarter, reflecting an approximately 25% increase in dividends per share compared to the same period of the prior year.
Overall, it was a great quarter for the company. If the same trend continues for the second half of the year; the company is likely to deliver 762 planes for the year.
Currently, the company pays a quarterly dividend of 0.91 cents per share and has a 2.5% yield.