There is no greater feeling to a dividend investor to get than the news that one of the companies you invest in is raising their dividend. Every time these companies do this, it is more money in your pocket. But just because a company raised dividends doesn’t mean their stock is worth buying. Yes a dividend is nice, but there is no point in earning one if your principal investment is going down the toilet.
With the most recent earnings season ending, many companies have finished announcing dividend increases. While the list below isn’t complete, I picked 7 companies who raised dividends that interest me the most.
Not all are worth investing your money in, so don’t get caught up by the large increases in quarterly payments.
Let’s get started.
7 Stocks Who Recently Raised Dividends
#1. Ingersoll Rand (NYSE: IR)
Ingersoll Rand is a diversified industrial company that has been around for over 100 years. The stock recently dropped this summer but has come roaring back.
In their recent earnings report, earnings per share came in at $1.49, beating estimates by $0.03. Revenues were up 6% compared to last year.
With the announcement of a 13% increase in the dividend, the stock is now yielding over 2%. And with the global economy slowly coming back, Ingersoll Rand is a good stock to buy and hold on to.
#2. American Financial Group (NYSE: AFG)
If you look at a stock chart of American Financial Group, it is a long term stockholders dream, which is a continuous slope that is increasing.
The company is an insurance holding company and also has does some business with investments as well. In their most recent earnings release, earnings per share came in at $1.61, beating by $0.27 and revenues were up 4% compared to last year.
When it comes to the dividend, the company raised it 12%, which brings the yield to a little more than 1%.
While a 1% dividend won’t excite most investors, there is no reason to believe the stock will hit any headwinds any time soon. However, since most dividend investors are interested in higher paying dividend stocks, this might be one to pass on.
#3. Altria (NYSE: MO)
I recently wrote about the issues surrounding Altria and other tobacco stocks. My feelings for this stock still remain the same. I think that now is a good time to get into this beaten down stock. It will take some time for it to recover, but I trust that the company will figure things out.
With the recent 8% increase in the dividend, the stock is yielding over 4%. In fact, this is the 48th consecutive time Altria has raised dividends.
#4. Westlake Chemical (NYSE: WLK)
Westlake Chemical faced some tough times in 2016, with revenues decreasing and as a result, the stock price. But come 2017 and revenues are rising quickly. In the past two quarters, revenue was up 76% and 99% respectively.
With the recent announcement of a 10% increase to the dividend, the company is now paying out $0.84 per share. This is a yield of roughly 1%.
While I like the company overall, I think dividend investors are better served with some other stocks on this list.
#5. Aqua America (NYSE: WTR)
Aqua America provides drinking and wastewater services in 8 states for over 3 million people. At the end of 2016 and beginning of 2017, the stock was stuck in a holding pattern but has since broken out and now trades near a 52 week high.
But don’t let that scare you. As a long term play, this is a great stock. After all, everyone needs drinking water. The only issue with this company is updating old infrastructure. But as this is an ongoing process, the stock shouldn’t suffer.
The company raised the dividend 7%, which means it is now yielding close to 2.5%. Not the highest dividend you can get on this list, but it is stable and is offering a higher yield than the S&P 500 overall.
This is a stock I would take a position in.
#6. Cheesecake Factory (NASDAQ: CAKE)
If you have never eaten at a Cheesecake Factory restaurant, you are missing out. The food is amazing.
Recently, the stock got slammed by investors, dropping by close to 40%! The reason for this was the slowing in revenues the company was making. They had been churning out 5% or higher revenue growth on a regular basis.
Then it suddenly slowed to around 2% and has held there for the past 2 quarters. The key to note here though is that revenues are still growing. It’s not like the company hit a wall and is falling apart. It’s just a bump in the road.
Many investors agree and have pushed the stock price higher.
As for the dividend, Cheesecake Factory raised the dividend by 21% to $1.16. The stock now yields close to 3%. I would be a buyer of this stock at this level.
#7. Illinois Tool Works (NYSE: ITW)
Illinois Tool Works is a company that produces specialty products, including engineered fasteners and components. The company produces products for a variety of companies, most I’ve never heard of. But, I’m not in this industry, so that makes sense.
The stock had a brief sell off this summer as it was downgraded, but I don’t see the same issues the analyst did. And most investors didn’t either as the stock price quickly recovered.
The company has been consistently growing revenues recently after a few quarters of falling revenue. With the announcement of a 20% increase to the dividend, Illinois Tool Works is now yielding just over 2%.
As with American Financial Group, I think dividend investors are better served with some other companies on this list, but that doesn’t mean you should avoid this stock.
Overall, there are 7 companies that recently raised dividends. None of these stocks scream to stay away, there are just some that make better sense for some investors compared to others. Your job is to research which ones fit into your investment plan and take action.
This author has no positions in any stock mentioned and does not plan to open any positions in any stocks mentioned for at least 72 hours after publication of this article.