I review the list of dividend increases every single week, as part of my monitoring process. This exercise helps me monitor existing holdings and also to monitor the dividend growth investing universe. Last but not least, it shows how I review companies quickly as well.
I focus on the companies that have managed to grow dividends for at least a decade. Over the past week, there were three notable dividend increases from such companies. The companies include:
Microsoft Corporation (MSFT) develops and supports software, services, devices, and solutions worldwide.
Microsoft increased quarterly dividends by 9.60% to $0.91/share. This is the 21st consecutive annual dividend increase for this dividend achiever. The company has a ten year annualized dividend growth rate of 10.35%.
The company grew earnings from $2.59/share in 2015 to $13.70/share in 2024.
The company is expected to earn $15.52/share in 2025.
The stock sells at 33.37 times forward earnings and yields 0.70%.
Microsoft has been executing well on its business, as evidenced by the growth in earnings per share and the dividend. However, the stock is valued at a premium, rightfully so. That being said, if it ever gets sold off, while fundamentals are not fundamentally impaired, it could be worth a second look.
Philip Morris International Inc. (PM) operates as a tobacco company. The company offers cigarettes and smoke-free products, including heat-not-burn, vapor, and oral nicotine products under the IQOS and ZYN brands; and consumer accessories, such as lighters and matches.
Philip Morris increased quarterly dividends by 8.90% to $1.47/share. This is the 17th consecutive annual dividend increase for this dividend achiever. The company has a ten year annualized dividend growth rate of 3.05%.
The company grew earnings from $4.42/share in 2015 to $4.53/share in 2024.
The company is expected to earn $7.52/share in 2025.
The stock sells at 21.50 times forward earnings and yields 3.60%.
PMI spent a whole decade investing for the future of the tobacco where traditional smoke products may be slowly but surely phased out. It's EPS didn't grow, which is why dividend growth was lackluster. The promise for future earnings per share growth could re-ignite future dividend growth. The latest dividend increase is much higher than the ten year historical average. It's definitely something to note. Another note is the expected growth in near-term EPS. Let's revisit next year and see if it held water. That being said the stock is not too expensive, provided EPS does start growing going forward. If we get to another decade of stagnant EPS growth however, the stock is expensive.
Texas Instruments Incorporated (TXN) designs, manufactures, and sells semiconductors to electronics designers and manufacturers in the United States, China, rest of Asia, Europe, Middle East, Africa, Japan, and internationally. The company operates through Analog and Embedded Processing segments.
Texas Instruments raised quarterly dividend by 4.40% to $1.42/share. This is the 22nd consecutive year of dividend increases for this dividend achiever. The company has a ten year annualized dividend growth rate of 14.87%.
The company grew earnings from $2.86/share in 2015 to $5.24/share in 2024.
The company is expected to earn $5.67/share in 2025.
The stock sells at 31.64 times forward earnings and yields 3.17%.
The company's earnings per share are declining from their peak from a few years back. This is why dividend growth is slowing down relative the the past 5 or 10 years. The stock is valued as if earnings per share will start growing again, and exceed their highs from a few years ago. The rate of dividend increases from management signals some caution ahead however.
Relevant Articles:
- Six Dividend Growth Stocks Raising Dividends Last Week
