10 Important Dividend Increases to Watch in August
In this article, we discuss 10 important increases to watch in August.
the global dividend payments suffered a lot in the face of the pandemic in 2020. According to a report by Janus Henderson, one company in eight canceled its payouts altogether and overall global dividends fell to $1.26 trillion during the year, down 12.2% from 2019. However, since the start of 2022, companies around the world are steadily raising their dividends after recovering from the ill effects of the pandemic.
Due to the growth in dividend investments, high-yield dividend stocks have shown a positive relationship with bond yields in the past two years, changing the trend of the past 30 years, as reported by Capital Group. the report also mentions that this continuing trend will not reduce the importance of dividend stocks even if interest rates rise further in the future.
According to a report published by Wall Street Journal, the companies in the S&P 500 paid out over $140.6 billion in dividends during the second quarter of 2022, up from $123.4 billion during the same period last year. Howard Silverblatt, a senior analyst at S&P Dow Jones Indices, mentioned that dividends are expected to grow at a faster pace than usual as businesses around the world are recovering after the pandemic. He further mentioned that rising interest rates and inflation have changed investment trends this year as investors flock toward previously overlooked dividend stocks. Some important dividend names in this regard are Merck & Co., Inc. (NYSE:MRK), Johnson & Johnson (NYSE:JNJ), and The Coca-Cola Company (NYSE:KO). Given this, we will discuss 10 dividend increases to watch in August.
Our Methodology: For this list, we selected companies that raised their dividend in August 2022. The dividend yields for the below-mentioned stocks were considered as of August 15.
10. Littelfuse, Inc. (NASDAQ:LFUS)
Dividend Yield as of August 15: 0.95%
Littelfuse, Inc. (NASDAQ:LFUS) is an Illinois-based electronic manufacturing company that produces circuit protection products and a wide range of other electronics. In Q2 2022, the company reported cash flow from operations at $113.6 million and its free cash flow came in at $87.2 million. Its dividend payments for the quarter amount to $26.2 million, up from $23.5 million during the same period last year.
On August 2, Littelfuse, Inc. (NASDAQ:LFUS) declared a 13% hike in its quarterly dividend to $0.60 per share. This was the company’s 11th consecutive year of dividend growth. As of August 15, the stock’s dividend yield came in at 0.95%.
In July, Baird downgraded Littelfuse, Inc. (NASDAQ:LFUS) to Neutral due to electronic-related risks and kept a $269 price target on the stock. However, analysts have presented a positive stance about other major dividend stocks, such as Merck & Co., Inc. (NYSE:MRK), Johnson & Johnson (NYSE:JNJ), and The Coca-Cola Company (NYSE:KO).
As of the close of Q1 2022, 24 hedge funds in Insider Monkey’s database reported owning stakes in Littelfuse, Inc. (NASDAQ:LFUS), up from 21 in the previous quarter. These stakes are valued at over $494.8 million. Among these hedge funds, Impax Asset Management was the company’s leading stakeholder in Q1.
9. Carlisle Companies Incorporated (NYSE:CSL)
Dividend Yield as of August 15: 0.96%
Carlisle Companies Incorporated (NYSE:CSL) manufactures a wide range of products belonging to different industries. On August 4, the company declared a quarterly dividend of $0.75 per share, raising it by 39%. With this increase, the company has extended its run of dividend increases to 46 years. As of August 15, the stock’s dividend yield stood at 0.96%.
Carlisle Companies Incorporated (NYSE:CSL) reported strong cash flow generation in Q2 2022, with its free cash flow standing at $127.6 million, up from $13.2 million in the previous quarter. The company had $353.2 million available in cash and cash equivalents at the end of the quarter. Carlisle Companies Incorporated (NYSE:CSL) paid $28 million in dividends in Q2 and repurchased shares worth over $50 million.
In August, BMO Capital raised its price target on Carlisle Companies Incorporated (NYSE:CSL) to $355 with an Outperform rating on the shares, appreciating the company’s solid Q2 earnings and expecting it to remain strong in the upcoming quarters.
The number of hedge funds holding stakes in Carlisle Companies Incorporated (NYSE:CSL) grew to 29 in Q1 2022, from 21 in the previous quarter, according to Insider Monkey’s data. These stakes are collectively valued at over $918 million.
8. Nordson Corporation (NASDAQ:NDSN)
Dividend Yield as of August 15: 1.07%
An American manufacturing company, Nordson Corporation (NASDAQ:NDSN) has been raising its dividends consistently for the past 59 years. The company pays a quarterly dividend of $0.65 per share, growing it by 28% on August 10. The stock’s dividend yield stood at 1.07%, as recorded on August 15.
At the end of Q1 2022, Nordson Corporation (NASDAQ:NDSN) had $120.9 million available in cash and cash equivalents, with total assets worth over $3.4 billion. The company generated over $84 million in free cash flow and paid $59.3 million in dividends during the quarter. Nordson Corporation (NASDAQ:NDSN) has a safe payout ratio of 23.3%.
AQR Capital Management owned a stake worth over $61 million in Nordson Corporation (NASDAQ:NDSN), becoming the company’s largest stakeholder in Q1 2022. Overall, 27 hedge funds tracked by Insider Monkey owned stakes in the Ohio-based company, declining from 34 in the previous quarter. The collective value of these stakes is nearly $230 million.
7. KLA Corporation (NASDAQ:KLAC)
Dividend Yield as of August 15: 1.36%
KLA Corporation (NASDAQ:KLAC) is a California-based semiconductor manufacturing company that also specializes in products belonging to other nanoelectronics industries. The company was popular among elite funds in Q1 2022, as 52 hedge funds in Insider Monkey’s database were bullish on the company, up from 49 in the previous quarter. The collective value of these stakes is over $1.8 billion.
On August 4, KLA Corporation (NASDAQ:KLAC) declared a 24% hike in its quarterly dividend to $1.30 per share. This marked the company’s 13th consecutive year of dividend increases and has raised its payouts at a CAGR of 17.1% in the last 5 years. As of August 15, the stock’s dividend yield was recorded at 1.36%.
In Q2 2022, KLA Corporation (NASDAQ:KLAC) reported an operating cash flow of over $819.2 million, up from $818 million in the previous quarter. The company’s free cash flow also jumped to $746 million, from $718.5 million in the preceding quarter. KLA Corporation (NASDAQ:KLAC) remained committed to its shareholder return, paying $157.6 million in dividends during Q2.
In July, Deutsche Bank raised its price target on KLA Corporation (NASDAQ:KLAC) to $400 with a Buy rating on the shares, calling the stock one of the best defensive plays in this uncertain market environment.
Vltava Fund mentioned KLA Corporation (NASDAQ:KLAC) in its Q1 2022 investor letter. Here is what the firm has to say:
“We then used the money freed up to, among other things, open three new positions. The stock price declines during the Russian invasion brought a lot of good prices to the market. Out of all the possibilities we considered, we picked the stock of KLA Corporation (KLAC).
KLA Corporation develops leading-edge equipment and services that enable innovation throughout the electronics industry. It specialises in process management and control in semiconductor manufacturing and the related nanoelectronics industries. During manufacturing processes, products must be inspected for defects and correct critical dimensions in order to identify and eliminate possible sources of problems. As customers continue to enforce Moore’s Law, smaller chips must meet more precise specifications, which in turn increases the need for advanced inspection and diagnostic tools. This is a key step within the entire manufacturing process and one in which the company has built a very strong, and in places dominant, global position. We have been watching and waiting for an opportunity to acquire this stock for some time already, and this year’s drop in its price finally prompted us to buy.”
6. Republic Services, Inc. (NYSE:RSG)
Dividend Yield as of August 15: 1.39%
Republic Services, Inc. (NYSE:RSG) is an Arizona-based solid waste collection company, providing services in waste transfer, waste disposal, recycling, and other energy services. Appreciating the company’s robust pricing and its Q2 earnings, Deutsche Bank lifted its price target on the stock to $158 and kept a Buy rating on the shares.
In Q2 2022, Republic Services, Inc. (NYSE:RSG) generated $544.7 million in free cash flow, up from $371.5 million in the previous quarter. The company’s operating cash flow for the quarter came in at $857.9 million, growing from $648.9 million in the preceding quarter. During the first six months of the year, Republic Services, Inc. (NYSE:RSG) returned $497.4 million to shareholders, of which dividend payments amounted to $291.2 million.
Republic Services, Inc. (NYSE:RSG) started raising its dividends in 2003, reaching the 19-year mark in 2022. On August 4, the company lifted its dividend by 8% to $0.495 per share. As of August 15, the stock’s dividend yield came in at 1.39%.
As per Insider Monkey’s Q1 2022 database, 34 hedge funds owned stakes in Republic Services, Inc. (NYSE:RSG), down from 38 in the previous quarter. The combined value of these stakes is over $1.28 billion. Richard Chilton, Cliff Asness, and Ken Griffin were some of the company’s most prominent stakeholders in Q1.
In addition to famous dividend stocks like Merck & Co., Inc. (NYSE:MRK), Johnson & Johnson (NYSE:JNJ), and The Coca-Cola Company (NYSE:KO), Republic Services, Inc. (NYSE:RSG) can also be a good addition to dividend portfolios because of its solid dividend growth streak.
5. AdvanSix Inc. (NYSE:ASIX)
Dividend Yield as of August 15: 1.45%
AdvanSix Inc. (NYSE:ASIX) is a New Jersey-based chemical company that specializes in the production of fertilizers. In Q2 2022, the company reported $95.8 million in operating cash flow, up from $49 million in the previous quarter. Its free cash flow grew to $78 million, from $28 million in the preceding quarter. The dividend payments for the quarter amounted to over $3.5 million.
On August 5, AdvanSix Inc. (NYSE:ASIX) declared a 16% hike in its quarterly dividend to $0.145 per share. As of August 15, the stock’s dividend yield stood at 1.45%.
Piper Sandler analyst Charles Neivert mentioned that the uncertain economy could have some impact on the nylon end markets. Given this, the analyst lowered his price target on AdvanSix Inc. (NYSE:ASIX) in August to $60 but kept an Overweight rating on the shares.
At the end of Q1 2022, 17 hedge funds in Insider Monkey’s database owned stakes in AdvanSix Inc. (NYSE:ASIX), down from 20 in the previous quarter. The collective value of these stakes is over $72 million. Scopus Asset Management was the company’s leading stakeholder in Q1, owning a stake worth over $12.7 million.
4. Microchip Technology Incorporated (NASDAQ:MCHP)
Dividend Yield as of August 15: 1.63%
Microchip Technology Incorporated (NASDAQ:MCHP) manufactures microcontrollers, mixed-signal, and integrated circuits. The company initiated its dividends in 2003 and has raised its dividends 71 times since its inception. On August 2, it declared a quarterly dividend of $0.301 per share, up 9% from the previous dividend. The stock’s dividend yield was recorded at 1.63% on August 15.
In fiscal Q1 2023, Microchip Technology Incorporated (NASDAQ:MCHP) generated $718.5 million in free cash flow, up from $633 million in the previous quarter. Its operating cash flow came in at $840.4 million, compared with $747.7 million in the preceding quarter. The company’s revenue of $1.96 billion also presented a 25% year-over-year growth.
Following the company’s strong fiscal Q1 results, B.Riley lifted its price target on Microchip Technology Incorporated (NASDAQ:MCHP) in August to $86 with a Buy rating on the shares.
The number of hedge funds tracked by Insider Monkey owning stakes in Microchip Technology Incorporated (NASDAQ:MCHP) stood at 42 in Q1 2022, down from 48 in the previous quarter. The collective value of these stakes is over $993.4 million.
3. Papa John’s International, Inc. (NASDAQ:PZZA)
Dividend Yield as of August 15: 1.83%
Papa John’s International, Inc. (NASDAQ:PZZA) is an Indiana-based American pizza restaurant chain. On August 4, the company announced a 20% hike in its quarterly dividend to $0.42 per share. As of August 15, the stock’s dividend yield came in at 1.83%.
In Q2 2022, Papa John’s International, Inc. (NASDAQ:PZZA) reported a 1.5% year-over-year growth in its revenue to $522.7 million. During the quarter, the company paid $12.5 million in dividends to shareholders. Moreover, it also repurchased $42.8 million worth of shares and had $329.8 million available for repurchase under the outstanding authorization.
Starboard Value LP owned a stake worth over $290.5 million in Papa John’s International, Inc. (NASDAQ:PZZA), becoming the company’s largest stakeholder in Q1 2022. Overall, 27 hedge funds in Insider Monkey’s database owned stakes in the pizza company in Q1, valued collectively at over $608.6 million.
2. Skyworks Solutions, Inc. (NASDAQ:SWKS)
Dividend Yield as of August 15: 2.19%
Skyworks Solutions, Inc. (NASDAQ:SWKS) is a California-based semiconductor manufacturing company that also specializes in mobile communications systems. The company’s cash flow remained resilient in fiscal Q3 2022, generating $86.3 million in free cash flow while its operating cash flow came in at over $213.8 million. It paid $90 million in dividends to shareholders, up from $82 million paid during the same period last year.
On August 4, Skyworks Solutions, Inc. (NASDAQ:SWKS) declared a quarterly dividend of $0.62 per share, raising it by 11%. The stock’s dividend yield came in at 2.19%, as of August 15.
Street analysts remained positive on Skyworks Solutions, Inc. (NASDAQ:SWKS)’s fiscal Q3 results and its business models. In August, both B. Riley and BMO Capital raised their price targets on the stock to $120 and $135, respectively.
As per Insider Monkey’s Q1 2022 database, 39 hedge funds owned stakes in Skyworks Solutions, Inc. (NASDAQ:SWKS), down from 41 in the previous quarter. The collective value of these stakes is over $780.5 million. With over 1.2 million shares, Citadel Investment Group was the company’s leading stakeholder in Q1.
1. Murphy Oil Corporation (NYSE:MUR)
Dividend Yield as of August 15: 2.84%
An American natural gas liquids company, Murphy Oil Corporation (NYSE:MUR) raised its dividend by 43% on August 3 to $0.25 per share. The company has been paying dividends to shareholders for over 60 years. As of August 15, the stock’s dividend yield stood at 2.84%.
In Q2 2022, Murphy Oil Corporation (NYSE:MUR) reported revenue of $1.1 billion, up 100% from the same period last year. The company’s free cash flow for the quarter came in at over $266.5 million, compared with $93.4 million in the previous quarter. Murphy Oil Corporation (NYSE:MUR) aims to utilize 75% of its adjusted free cash flow to reduce long-term debt.
In July, MKM Partners initiated its coverage of Murphy Oil Corporation (NYSE:MUR) with a Buy rating and a $38 price target.
As of the close of Q1 2022, 20 hedge funds tracked by Insider Monkey owned stakes in Murphy Oil Corporation (NYSE:MUR), valued at over $167 million. In the previous quarter, 24 hedge funds owned stakes in the company, worth $136.6 million.