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If you were going to buy a dividend stock, wouldn’t you want to invest in one that was about to increase its dividend?
In investing, one thing remains true: dividend investing has a track record of building wealth over the long term.
With the holidays right around the corner, now is a good time to give yourself the gift of extra dividend income.
Each week there’s over a hundred companies paying out millions of dollars in dividends to shareholders. And with nearly 85% of the S&P 500 stocks now paying a dividend, the choices are overwhelming.
An easy way to screen dividend paying stocks is to focus on those that are actually increasing their payments. This week there are five such stocks worthy of mentioning.
Without further delay, here are the top five stocks increasing their dividends this week.
Dividend Increase No. 1: Prudential Financial Inc. (NYSE: PRU)
Prudential Financial offers various financial services, including life insurance, mutual funds and annuities. It has managed to increase its dividend in each of the last five years and has been paying a dividend for 11 years.
Its latest dividend increase comes this week. Prudent Financial will be upping its payout from 53 cents to 58 cents. Shares trade ex-dividend on Nov. 21.
Prudential’s stock has been a lackluster performer over the last year, down 5%. But its dividend yield is 2.75%, it trades less than book value and has a forward P/E ratio (price-to-earnings ratio based on next year’s earnings estimates) of just 8.
Dividend Increase No. 2: Six Flags Entertainment Corp. (NYSE: SIX)
This theme park operator offers a very healthy 5.1% dividend yield. It’ll be increasing its dividend payment by nearly 11% to 52 cents this week, marking the third straight year the company has increased its dividend. It also trades ex-dividend on Nov. 21.
Shares of Six Flags are up just 5% over the last year after a few mishaps and bad press, with such headlines as ‘Texas Giant’ Builder Blames Six Flags in Death. However, its depressed stock price is providing a great buying opportunity.
Dividend Increase No. 3: Snap-on Incorporation (NYSE: SNA)
Snap-on offers just a 1.6% dividend yield, but it is boosting its dividend by over 20% this week. It’ll trade ex-dividend Nov. 20.
This maker of various tools and equipment has been paying a dividend for 29 years. Its tools cater to professional users that service various transportation industries, including marine, auto, railroad and aviation.
Shares are up 28% over the last year and trade at less than 20 times earnings, leaving room for potential upside on the back of a rebounding economy. And with the company only paying out 25% of its earnings via dividends, there could be more future dividend increases ahead.
Dividend Increase No. 4: Microchip Technology Inc. (NASDAQ: MCHP)
Microchip offers a solid 3.3% dividend yield but is boosting its dividend payment by less than 1%. However, this week will mark the 14th straight quarter of quarterly dividend increases. Few companies increase their dividends that frequently. Over time, that adds up. Microchip shares trade ex-dividend on Nov. 19.
Shares of this semiconductor company are flat over the last year. The stock has yet to fully recover after a huge sell-off in October due to lowered earnings guidance. Nevertheless, earnings are still expected to grow a modest 10% next year and shares trade at a forward P/E of just 15.
Dividend Increase No. 5: Aramark (NASDAQ: ARMK)
This food processing and uniform servicing company offers just a 1.2% dividend yield, but it has paid a dividend every quarter since its December 2013 IPO. It’s upping its dividend 15% and trades ex-dividend Nov. 21.
Since going public, Aramark shares have risen 25% – with room left to run. Its dividend is just a 27% payout of earnings and earnings are slated to grow by 13% this year.
One of the more exciting parts of Aramark’s business is its food service operations in major NFL stadiums, including managing the beer and food operations for the Chicago Bears, Tampa Bay Buccaneers and Minnesota Vikings.
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