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8 Dividend Stocks Increasing Payouts in 2021

Not all dividend stocks are equivalent. Among the traps that investors fall into is the yield trap. That is, they purchase a stock because it has a high dividend yield. However a dividend yield is truly simply a mathematics issue. That is, the dividend yield is the revealed per share annual dividend divided by the current share cost.

So a company with a $2 yearly dividend and a share rate of $35 has a dividend yield of 5.7%. That’s actually a remarkable yield.

However, the company has true control of just one element of that formula. And, as we learned in 2020, when things get rough, a dividend is frequently the very first thing to get cut.

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A much better method to shop for dividend stocks is to look for business that are increasing the quantity of their annual dividend. With an increasing dividend the cash you produce from that stock will continue to increase no matter what takes place to the stock rate. And investors that do not require that earnings right away can, in many cases, reinvest the dividends back into the stock to optimize their total return.

Lots of stock screeners let you sort for business that have, or will be, increasing their dividends. Here’s a list of eight stocks that have actually just recently increased their dividend, or will be soon. And a few of the business on this list have increased their dividend quite considerably.

Nucor (NYSE: NUE )

Ternium (NYSE: TX )

Procter & Gamble (NYSE: PG )

Johnson & Johnson (NYSE: JNJ )

Tractor Supply Company (NASDAQ: TSCO )


Whirlpool (NYSE: WHR )

Anthem (NYSE: ANTM).

Dividend Stocks: Nucor (NUE)

Source: Shutterstock.

The very first of the dividend stocks on this list is Nucor, the largest steel producer in the United States. Steel costs began increasing in 2020 sustained by an absence of supply and remarkably high need. A proposed infrastructure plan is likely to keep need high.

What the final facilities strategy will look like is anybody’s guess. But it’s particular to create a favorable environment for steel demand. Which need should put a flooring under NUE stock even if steel prices move lower as production continues to come online.

Story continues.

Nucor has actually increased its dividend for 48 successive years. This makes it a dividend aristocrat and puts it 2 years shy of being in the a lot more exclusive club of dividend kings. The average boost of the company’s dividend over the last three years has actually been 6.61%. By using the Guideline of 72, that implies the business will double its dividend payment in roughly 10 years.

Ternium (TX).

Source: Shutterstock.

Sticking with steel stocks, I’ll offer up Ternium as a complementary stock to Nucor. Ternium is the leading steel company in Latin America. The business is ending up being more cost competitive and has taken actions to increase its liquidity and overall balance sheet during the pandemic.

The stock is near its all-time high. Ternium reports earnings in late April and is expected to show incomes development of 154.4% for the quarter. Both of these indicators offer assistance to TX stock getting ready to press into record area.

Ternium pays out an annual dividend. The business did not increase its dividend in 2020, however simply raised it 90 cents on April 15. This averages out to 41.81% of the business’s routing 12-month profits. Normally, financiers must be cautious when a business breaks a string of dividend boosts. However, 2020 was a difficult year for most companies. Ternium didn’t cut its dividend, nor did it suspend it. It merely kept it the same and had a history of increasing it prior to the pandemic.

Dividend Stocks: Procter & Gamble (PG)

Source: monticello/ Shutterstock.com.

Customers are anticipated to continue the deep cleansing routines they initiated throughout the pandemic. That’s a positive driver for Procter & Gamble. As a protective stock, the company had a terrific year in 2020 as more Americans ensured their medication cabinets were well supplied. In reality, at one point, PG stock was acting like a bona fide growth stock, soaring 41% from its pandemic low.

The stock has actually since quit those gains, but it still sports a 14.5% gain over the last 12 months. Nevertheless, this is a post about dividend stocks and that’s where PG stock continues to shine. The company just recently revealed a 10% boost in its dividend, raising the dividend from 79 cents to 86 cents per share.

That makes it 59 successive years of raising its dividend payment for this dividend king. And the company has been raising its dividend at a rate of 13.87% over the last three years.

Johnson & Johnson (JNJ)

Source: Niloo/ Shutterstock.com.

Do not let the recent pause in the company’s vaccine rollout discourage you from taking a close take a look at JNJ stock. Unlike the other biotech business that brought an unique coronavirus vaccine to market, Johnson & Johnson has a host of other earnings streams.

Those earnings streams in addition to its vaccines propelled the stock to its all-time high in late 2020. The business is only up about 8% in 2021, but it’s up 38% because the beginning of the pandemic. And the company just posted a double beat on earnings that might serve as an additional catalyst for the stock.

JNJ just recently increased its dividend by 5% from $1.01 to $1.06. That matches Procter & Gamble with 59 consecutive years of dividend development. And over the previous three years, the business has been increasing its dividend by an average of almost 20% (19.88%).

Dividend Stocks: Tractor Supply Company (TSCO)

Source: Shutterstock.

After delivering strong lead to 2020, Tractor Supply Company is benefiting from a number of recent analysts’ upgrades that might provide financiers with another year of growth, albeit at a slower rate than in 2020.

Nevertheless, a bit of slower growth shouldn’t be a huge issue when the business rewards its investors with a massive 30% dividend increase. An increase of this magnitude would generally be a red flag. Often business’s will release a sizable dividend increase to offset a bad development story.

However, in the case of TSCO stock, the company has a regular pattern of increasing its dividend payment. In reality, this boost makes it 10 straight years for the business and offers it an average boost of 42.86% over the last three years. A great strategy would be to accept the business’s generosity and get on board the stock for some share cost growth and to catch what amounts to a $2.08 yearly dividend.

Costco (EXPENSE).

Source: ilzesgimene/ Shutterstock.com.

Costco was another retailer that was a pandemic entertainer. However the business has been providing financiers a lot to be delighted about even prior to 2020. The warehouse club operator has actually balanced earnings growth of almost 9% in the last couple of years. And it accomplishes this growth while still expanding into different places (its footprint now consists of more than 800 shops). Plus, the company takes pleasure in a membership retention rate of more than 90%.

Throughout the pandemic, the company added e-commerce to its bag of tricks. This positions it for future growth even as rivals like Amazon (NASDAQ: AMZN) and Walmart (NYSE: WMT) continue to nip at its heels.

Costco is a good example of not being too hung up on a yield. COST stock has a pretty weak one; it yields only about 0.72% at the time of this writing. Nevertheless the company just increased its dividend by 9 cents in April 2021. And over the previous three years, it’s provided 41.03% dividend growth. On top of that, Costco provided a $10 per share unique dividend in December 2020.

Dividend Stocks: Whirlpool (WHR)

Source: Shutterstock.

As a Michigander (yes, that’s a term) I felt like I needed to include Whirlpool on this list of dividend stocks. However it’s not like they haven’t made it. WHR stock is up 136% in the last 12 months. And the reason is obvious. When individuals purchase brand-new homes, they tend to buy brand-new home appliances. Which, along with cost-cutting steps applied by the business, is equating to strong development on the top and bottom lines.

In the business’s first-quarter earnings report, the home appliance producer made $7.20 in adjusted EPS and posted profits of $5.4 billion. Analysts were expecting a $5.40 EPS on profits of $4.9 billion.

Whirlpool also rewarded its shareholders with a 12% dividend increase. This begins the heels of a 5 cent per share increase that the company provided to shareholders in the third quarter. The business has now delivered 12.79% dividend payment development in the last three years.

Anthem (ANTM).

Source: Jonathan Weiss/ Shutterstock.com.

Health care has stayed a red-hot sector. Anthem is the largest for-profit handled health care business in the Blue Cross Blue Shield (BCBS) Association. ANTM stock is up 45% in the last 12 months and 20.7% in 2021.

Anthem recently released an 18.95% dividend increase from 95 cents per share to $1.13. This brought the company’s three-year dividend development to 40.74%. This is another example where if you just take note of the yield, you’re missing out on the underlying story.

Anthem simply reported first-quarter revenues and beat profits expectations. Quarterly revenue was available in as a slight miss, however was still 9% higher than the prior quarter.

In a sector like healthcare, long-term trends can say a lot more about a stock’s potential customers than short-term efficiency. In Anthem’s case, the company has seen its yearly incomes grow at a 16.5% clip over the previous five years. This is considerably greater than the 11% market average. And more impressively it exceeds the wider market which averages 12%.

On the date of publication Chris Markoch did not have (either straight or indirectly) any positions in the securities discussed in this article.

Chris Markoch is a freelance financial copywriter who has actually been covering the market for 7 years. He has been composing for Investor Place because 2019.

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