3 Stocks That Could Hike Dividends In November
In any given year, the market is full of news. And it can sometimes feel difficult for individual investors to keep up with everything.
That’s especially true this year. For example, let’s say you’re an income investor. You’re looking for strong candidates to add to your watchlist — or perhaps even add to your portfolio right away. But you want to see some evidence that your payouts will rise over time — so you make a note to watch for news of stocks that are raising dividends.
That’s certainly a good intention. But between endless news about Covid-19, Federal stimulus, rising tech stocks, correction worries, battles in Washington… it can sometimes feel overwhelming.
Fear not. That’s why I’m here.
As you may know, each month I make a point to screen for stocks that are likely put more cash in your pocket. As Chief Investment Strategist of High-Yield Investing, it’s part of my job.
In each issue of my premium newsletter, I scan the market for potential dividend hikes. Ideally, I’m looking for hikes that could happen over the next four to six weeks. I also highlight noteworthy special distributions on the horizon.
We don’t do this just for fun. In a perfect scenario, we find great ideas for consideration in our premium portfolio… Companies posting outsized double-digit increases, and reliable dividend-payers that have been steadily growing payouts for a decade or more.
I flag these stocks first for my premium readers so that they can research them and get a head start. Then, I share them with the public.
We’ve had a pretty good run of finding solid ideas from this, so it pays to follow along each month. Some of them end up paying off big time.
If you’re looking for a potential addition to your income portfolio, then I can’t think of a better place to start. So without further delay, here’s what I’ve found this month…
3 Upcoming Dividend Hikes
1. Abbott Labs (NYSE: ABT) Abbott has a middling yield of 1.3%. But that’s not because the healthcare company has been stingy with its distributions… In fact, this Dividend Aristocrat hasn’t missed a payment since 1926. Along the way, it has raised payouts for the past 48 consecutive years.
At a pretty strong clip, too, for a business this size. Distributions have risen nearly 40% since 2016. But a relentlessly rising share price has compressed the yield (not that shareholders mind). The stock marched to an all-time high above $110 recently.
Abbott has built a sprawling portfolio of innovative products on the back of heavy R&D spending. Its medical devices, diagnostic equipment, nutritional supplements, and other products are available in 160 countries around the globe, generating $30 billion in yearly sales.
As a leader in lab diagnostic tools, Abbott is benefitting handsomely from the ongoing wave of Covid-19 tests performed globally each day. The company took in $615 million in sales from this area alone last quarter, led by a 233% surge in molecular diagnostics.
With almost half a century of uninterrupted dividend hikes, I expect ABT to reward investors with another increase in late November or early December.
2. Cintas (NYSE: CTAS) — Cintas is a leading supplier of corporate uniforms, delivering freshly laundered ones to businesses each week. The company also sells ancillary products such as janitorial supplies. It has more than a million customers, mainly in the hospitality, healthcare, and foodservice industries.
This isn’t a glamorous field, but demand is remarkably steady. Cintas has increased revenues and profits in 49 of the past 51 years. That growth has fueled one of the market’s most impressive dividend track records. The company has hiked payouts every year since 1983, increasing at a 22% clip over the past five years.
Last year, I predicted a sizeable 20%+ plus hike. And Cintas delivered shortly after, boosting its payouts by 24% to $2.55 per share.
Cintas makes only one dividend payment a year. But it’s coming up soon. In the meantime, management is adroitly navigating the Covid storm. In fact, operating cash flows climbed 12% last quarter. And with a modest payout ratio around 30% of its earnings, there is room for another hefty increase on the near-term horizon.
3. McCormick (NYSE: MKC) – Restaurants may hate to see families cooking more at home these days, but not McCormick. The world’s largest spice maker sells everything from cinnamon to cayenne pepper, bringing flavor to bland food around the world. The portfolio also includes well-known brands such as French’s mustard, Stubb’s barbecue sauce, Old Bay seasoning, and Grill Mates marinades.
As a staple on grocery store shelves everywhere, McCormick gets about 60% of its sales from consumers, with the rest coming from restaurant chains, packaged foods purveyors, and other commercial customers.
McCormick has a distinguished track record, increasing dividends for 34 consecutive years. Payouts were bumped by a nickel last November… And the one before… And the one before that. A similar increase would lift the annual payout to $2.68 per share.
Citing the “sustained” trend of more families cooking at home, the company reported a healthy 8% increase in sales last quarter. I think November will bring another dividend raise, as well as a 2-for-1 stock split.
Action To Take
As always, remember that just because these stocks are likely to increase dividends doesn’t necessarily make them “buys.” These are merely ideas to get you started in the hunt for high yields.
With that said, we’ve got three very solid candidates this month. Starbucks and Visa, in particular, offer good examples that growth and income don’t have to be diametrically opposed. After all, with a little patience, investors could be rewarded with with a high “yield on cost” and healthy price appreciation.
All of these stocks are worthy candidates for more research as a potential addition your portfolio. But if you want to know about my absolute favorite high-yield picks, then you’ll need to be a member of High-Yield Investing.