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It’s a new year and a new month. With that, we’ve done the groundwork for finding the top dividend increases of the month.
Dividends can make a big difference in investors’ portfolios. Just look at the S&P 500. Over the last 10 years, the S&P 500 is up 61%. If you take into account the dividends, the S&P 500 is up 99%. A 38 percentage point difference over 10 years is a pretty big deal.
But then there’s the idea that companies that steadily increase their dividends can even outperform stocks that simply pay dividends. Hence, the reason we dig deep each month to find companies willing to pay investors more.
With all that in mind, here are the top five dividend increases for January:
No. 1 January Dividend Increase: Lincoln National Corp. (NYSE: LNC)
Lincoln National offers a 2% dividend yield and will be upping its dividend by 25% in January. It will now be paying a quarterly dividend of 25 cents a share. The company is paying out just 18% of its earnings via dividends. As well, Lincoln has upped its dividend for five years in a row.
Lincoln National is a financial company offering annuities, life insurance, retirement plans and financial planning. It’s been turning around its business since the 2008 financial crisis, including improving its balance sheet.
Shares trade ex-dividend on Jan. 7.
No. 2 January Dividend Increase: AbbVie Inc. (NASDAQ: ABBV)
AbbVie is paying the highest dividend yield on our list at 3.9%. It’s upping its dividend by 12% and will be paying a 57 cents per share quarterly dividend. This relatively high dividend yield is backstopped by AbbVie’s strong immunology drug, Humira.
The company is looking to expand the uses of Humira, which is already a key drug, making up 50% of AbbVie’s total sales. Humira has approvals for rheumatoid arthritis, psoriasis and Crohn’s disease.
Shares trade ex-dividend on Jan. 13.
No. 3 January Dividend Increase: The Buckle Inc. (NYSE: BKE)
The Buckle is perhaps the most interesting name on our list this week. It’s upping its quarterly dividend to 25 cents a share, a 9% increase. Its dividend yield is 3.2%. The Buckle operates some 450 stores that feature apparel, accessories and footwear for young men and women.
But the interesting part is that it’s also paying a $1 per share one-time dividend. Combining its new quarterly dividend and one-time dividend, shares of The Buckle are offering a 6.5% pro forma dividend yield.
The Buckle trades ex-dividend on Jan. 13.
No. 4 January Dividend Increase: Hormel Foods Corp. (NYSE: HRL)
Hormel Foods is offering a 1.5% dividend yield and will be upping its quarterly payment by 16% this month. It will soon be paying out a 29 cents a share quarterly dividend.
Hormel is a key maker of food and meat products. It’s seeing marked growth in the grocery and refrigerated foods businesses, despite interim weakness in pork and turkey exports, given the avian influenza outbreak.
There’s also its entry into natural foods that should help drive growth in 2016 and beyond. In mid-2015, Hormel bought Applegate Farms. In 2014, it bought CytoSport to give it a presence in ready-to-drink protein beverages.
The stock trades ex-dividend on Jan. 14.
No. 5 January Dividend Increase: Pentair PLC (NYSE: PNR)
Pentair is paying a 2.7% dividend yield. Later this month it’s upping its dividend by 3% to 33 cents a share. Pentair is an industrial company that’s been paying a dividend for 39 years.
Pentair shares fell 25% in 2015 due to slowing oil and gas markets – a business that
accounts for 20% of its sales. But its key growth area includes the water purification business, where it’s building scale and looking to build a competitive advantage.
As the demand for water and water purification rises, this is good news for Pentair. An ever-increasing world population increases the demand for water. The other beauty of building filtration systems is that they lead to more profitable long-term and higher-margin customer relationships.
Pentair trades ex-dividend on Jan. 27.
To discover more companies that pay steady dividends all year round, click here.