Nearly one-third of the Club’s 35-stock portfolio has hiked its dividend so far this year, underlining confidence in the businesses and bolstering the total return prospects for shareholders like us. Johnson & Johnson (JNJ) and Costco Wholesale (COST) became the latest Club holdings to hike their payouts this week, bringing the year-to-date total to 11. On average, those 11 companies have increased their dividends by a healthy 10.4% this year on prior quarterly payouts. The biggest increase of 2023 came from oilfield services firm Halliburton (HAL), which in January raised its dividend by a third, to 16 cents per share. Cisco Systems (CSCO), meanwhile, raised its dividend by a more modest 2.6%, to 39 cents a share, from 38 cents. Here is the full list of the Club stocks that have raised their dividends this year. What it means The decision to raise a dividend is not one that companies take lightly. When a firm decides to increase its dividend, investors usually see it as a sign the company is confident it will be able to generate the cash flows required to support a higher payout. In the case of these 11 Club holdings, the dividend increases are favorable developments, even if the magnitude varies from company to company. But regardless of the size, we recommend investors reinvest their dividends , helping to grow total returns over time. Of course, not every stock on this list is necessarily known and owned for its dividend. For example, Humana (HUM) has a dividend yield of just roughly 0.7%. But, even if not core to our investment thesis, an annual boost to a dividend — along with a steady increase in stock price — is more than acceptable. Additionally, for a company like Humana, its dividend works in concert with a share buyback program, so capital is returned to shareholders in two ways. It is no surprise Johnson & Johnson, Procter & Gamble (PG) — which delivered a quarterly earnings beat Friday — and Linde (LIN) have raised their dividend already this year. All three companies are what’s known on Wall Street as dividend aristocrats — a title bestowed upon companies that have raised their dividends annually for at least 25 years in a row. What’s next Club holdings Caterpillar (CAT) and Emerson Electric (EMR) also are dividend aristocrats, but they’ve yet to disclose payout bumps in 2023. That announcement typically happens later in the year for those companies. Apple (AAPL) is another company not on our list at the moment. But some analysts expect the iPhone maker to modestly raise its dividend when it reports earnings May 4. In a note to clients this week, JPMorgan analysts said they expect Apple’s annualized dividend to rise to 98 cents a share, from its current payout of 92 cents a share. Elsewhere in the portfolio, we’re hopeful Walt Disney (DIS) will restore its dividend by the end of the year. The media-and-entertainment giant initially suspended it during the early days of the Covid-19 pandemic. It has officially been on pause since November 2020 , amid a push from an activist investor to invest more in streaming content . We also remain hopeful that Costco will soon announce a special dividend payout, on top of its quarterly distribution. The wholesale retailer has typically done so every few years, with the most recent one occurring in 2020, at $10 per share. Prior to that, Costco issued a $7-per-share special dividend in 2017 . (See here for a full list of the stocks in Jim Cramer’s Charitable Trust .) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
Johnson and Johnson hygiene products for sale in a supermarket in Madrid, Spain.
Cristina Arias | Cover | Getty Images
Nearly one-third of the Club’s 35-stock portfolio has hiked its dividend so far this year, underlining confidence in the businesses and bolstering the total return prospects for shareholders like us.
