We’re coming out with our list a bit early, as a number of the companies will be paying out their dividends in early April.
Now, I’ve talked a lot about stocks that consistently up their dividends. The biggest takeaway is that the stocks that are willing to reward shareholders with steady dividend increases tend to outperform those that don’t pay dividends.
Over the last year, the market has been somewhat rocky; the S&P 500 is down just over 1%. However, on a total return basis, which includes dividends, the S&P 500 is up 1%. Taking that a step further, thePowerShares Dividend Achievers ETF (NYSEArca: PFM) – which invests in stocks that have upped their dividends for 10 years or more – is up 4.1% over the last year.
So with that in mind, here are the top five dividend increases for the month of April:
No. 1 April Dividend Increase: Cisco Systems (NASDAQ: CSCO)
Cisco is upping its quarterly dividend payment by 24% in April and will be paying a $0.26 a share dividend. That’s a heck of a dividend increase for a $140 billion market cap company. It’s also offering a sizable dividend yield, coming in at 3.7%.
Cisco is an underrated bet on the tech market, which includes the expansion of wireless and Wi-Fi – a market it dominates. It also has a stronghold on the router and switch market, which should continue to provide strong free cash flow for that hefty dividend.
Cisco trades ex-dividend April 4.
No. 2 April Dividend Increase: Comcast (NASDAQ: CMCSA)
Although it needs no introduction as a near $150 billion market cap company, Comcast flies under the radar a bit in the dividend world.
But the fact that it’s upping its dividend by 10% next month and will soon be paying out a $0.275 a share quarterly should catch investors’ attention. The stock offers a 1.8% dividend yield and has managed to up its dividend for five straight years.
Despite the fears over cable customers canceling their service to opt for an Internet-only lifestyle, Comcast still has a large user base. It’s also managed to continue making a name for itself in the Internet world by investing in companies like Vox and BuzzFeed. These are big positives as it makes its move to gain access to a younger audience.
Comcast shares go ex-dividend April 4.
No. 3 April Dividend Increase: General Dynamics (NYSE: GD)
The defense contractor and maker of military equipment – like the F-16 fighter jet – offers a 2.4% dividend yield. Like clockwork, almost a year ago exactly, General Dynamics made our list of dividend hikers to watch.
General Dynamics is upping its dividend by 27%. It will soon be paying a $0.76 a share quarterly dividend. It gets better too: General Dynamics has upped its dividend for 18 straight years. And despite its solid dividend yield, it’s still only paying out 33% of earnings via dividends.
Shares trade ex-dividend April 6.
No. 4 April Dividend Increase: General Mills (NYSE: GIS)
General Mills, the consumer staples company, is a steady dividend stock. It’s upped its dividend for 12 straight years. And it’s upping its quarterly dividend 5% in April to $0.46 a share.
Now, General Mills’ dividend yield is at 3% and the company is paying out just around 65% of its earnings via dividends. The beauty of General Mills is that it’s somewhat recession-proof. Its core products, such as cereals and snacks, tend to be purchased regardless of how the broader economy is doing. Plus, it’s shifting toward more organic products, which should help it better accommodate evolving taste preferences.
The cereal stock trades ex-dividend April 7.
No. 5 April Dividend Increase: Foot Locker (NYSE: FL)
Foot Locker is boosting its quarterly dividend by 10% in April, which puts its dividend at $0.275 a share.
This shoe retailer is another underrated dividend play. Its yield is just 1.7%, but there’s still plenty of room to grow. Foot Locker already has a five-year streak of consecutive dividend increases and is paying out less than 25% of its earnings via dividends.
Foot Locker “wins” regardless of who actually prevails in the sneaker wars. Nike (NYSE: NKE) is at the forefront in the sneaker and shoe market, but is facing competition from the likes of Under Armour (NYSE: UA). No matter which company ends up winning, Foot Locker will profit from increased sales and traffic as both companies look to one-up each other with new products.
Shares trade ex-dividend April 13.
This article is brought to you courtesy of Marshall Hargrave from Wyatt Research.