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Dividends can, and do, make a big difference in investors’ portfolios.
There’s a reason that Warren Buffett and his Berkshire Hathaway (NYSE: BRK-B) are invested heavily in some of the best dividend-paying stocks.
Fifteen of Berkshire Hathaway’s top 20 holdings pay a dividend. Over half of those pay a dividend yield that tops the average S&P 500 dividend yield.
The S&P 500 is up 64% over the last decade, but when you factor in dividends, it’s a completely different story. The total return, including dividends, for the S&P 500 over that same decade is an impressive 103%.
However, the story can get even better if investors focus on companies that consistently pay investors more. That is — consistent dividend increases.
The SPDR S&P Dividend ETF (NYSE: SDY) is one of the most popular dividend ETFs around. This ETF focuses on US stocks that have managed to boost dividends for at least 25 straight years.
Over the last decade, this collection of consistent dividend payers — the SPDR S&P Dividend ETF — has outperformed the total return of the S&P 500 by ten percentage points.
Focusing on companies with a record of dividend increases pays off in the long-term. With that in mind, here are the top dividend increases for April:
Top Dividend Increases: Foot Locker (NYSE: FL)
The shoe business is moving at a fast pace for Foot Locker. It’s managed to grow same-store sales by 4% or more every year since 2010. Now it’s focusing on sports apparel, becoming a leader in children’s shoes, and expanding into Europe. It’s also growing its online business; its U.S. online sales grew by 20% last year.
Foot Locker is also a relatively cheap play in the shoe and apparel market. Shares trade at just 12 times next year’s earnings, while Nike (NYSE: NKE) is trading at 21 times.
Foot Locker company is upping its quarterly dividend by 13% in April to $0.31 a share. This solid shoe company pays a 1.7% dividend yield and has a six-year record of consecutive dividend increases.
Shares trade ex-dividend April 11.
Top Dividend Increases: Oracle (NASDAQ: ORCL)
Oracle has been investing heavily in the Infrastructure as a Service (IaaS) market. It’s now positioned to take on the giants in the cloud computing market, including Amazon (NASDAQ: AMZN) and Microsoft (NASDAQ: MSFT).
Oracle’s IaaS offering is also cheaper and faster than the widely popular Amazon Web Services. Oracle’s cloud business has already hit the $5 billion mark and selling more cloud application software than Salesforce.com (NYSE: CRM).
However, unlike other software peers, Oracle is still relatively cheap — trading at 16 times next year’s earnings estimate and a sizable discount to the likes of Salesforce.com. And the cash it’s bringing in from the cloud market should help backstop its already solid dividend.
Oracle pays a 1.7% dividend yield and is upping its quarterly dividend by a hefty 27% to $0.19 a share. It’s only paying out 30% of its earnings via dividends and has a five-year streak of consecutive dividend increases.
Shares trade ex-dividend April 10.
Top Dividend Increases: American Tower (NYSE: AMT)
American Tower is a slow and steady dividend company, one that generates plenty of cash flow. It has one of the largest wireless tower networks in the world and has a massive wireless infrastructure. Basically, it’s a bet that people will continue to gravitate toward wireless usage. It’s also growing its international presence, recently adding tower sites in foreign markets, including India.
American Tower is paying a 2.1% dividend yield and is increasing its quarterly dividend by 7% this month to $0.62 a share. It now has a five-year string of consecutive dividend increases.
Shares trade ex-dividend April 10.
Top Dividend Increases: Colgate-Palmolive (NYSE: CL)
Colgate is one of the biggest personal products companies around, selling Colgate toothpaste, Ajax, Palmolive and Softsoap. The recent pressure from the strong dollar, which has affected earnings, has created a buying opportunity in Colgate. Colgate has been underperforming major peers Procter & Gamble (NYSE: PG) and Unilever (NYSE: UN) over the last year.
As a leader in major personal care markets Colgate has a 35% market share in the global toothpaste market. It’s also still growing sales across its oral, personal and home care segments.
Colgate-Palmolive pays a 2.2% dividend yield and is raising its dividend by 3% this month to $0.40 a share. The consumer staples company has a remarkable 53-year streak of consecutive dividend increases.
Shares trade ex-dividend April 19.
Hasbro (NYSE: HAS)
Hasbro, the toymaker, has faced its fair share of competition from electronic gaming and smartphones. However, the company has stayed resilient. Shares of Hasbro have outperformed the S&P 500 by threefold over the last five years.
Compared to its top competitor, Mattel (NASDAQ: MAT), Hasbro been gaining market share Hasbro’s big coup was taking the branded-toy Disney (NYSE: DIS) business from Mattel and it is now reaping the benefits. Hasbro is also focusing on other growth areas, including mobile gaming. It’s also working on cutting costs; it has increased its operating profit margin for three straight years.
Hasbro has upped its dividend for seven straight years. It’s increasing its quarterly dividend this month by 12% to $0.57 a share. Its dividend yield is now a solid 2.3%.
Shares trade ex-dividend April 27.