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Dividend Watch: 2 Red-Hot Stocks Boosting Payouts

Everybody loves dividends, as they provide a passive income stream, limit drawdowns in other positions, and provide more than one way to profit from an investment.

And when considering dividend-paying stocks, those with a history of boosting their payout are prime considerations, reflecting their commitment to increasingly rewarding shareholders.

In addition, consistent dividend hikes reflect the company’s successful nature, opting to share profits with shareholders.

For those seeking companies that have recently boosted payouts, Apple (AAPL - Free Report) and Vistra (VST - Free Report) fit the criteria. Let’s take a closer look at each.

Apple Keeps Generating Cash

Apple’s latest set of quarterly results came with several positives, including record Services revenue and record EPS for its March quarter. Total sales grew 5% year-over-year throughout the above-mentioned period, with adjusted EPS of $1.65 up 8% from the same period last year.

The company’s stellar cash-generating abilities have allowed it to reward shareholders nicely, with the tech titan announcing a 4% boost to its quarterly dividend payout. Apple also unveiled a massive $100 billion additional repurchase program in its latest quarterly report, putting even more of its cash to work.

The tech titan generated $20.8 billion in free cash flow throughout its latest period.

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Image Source: Zacks Investment Research

Due to its heavy manufacturing exposure in China, the recent de-escalation of trade tensions is a massive positive. Apple previously warned it may pass the higher costs onto consumers through iPhone price hikes, so the recent news is excellent for both parties.

Shares jumped on the news, gaining nearly 20% since the announcement.

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Image Source: Zacks Investment Research

Vistra Increases Payout Again

Vistra safely operates a reliable, efficient, power generation fleet of natural gas, nuclear, coal, solar, and battery energy storage facilities. Shares have been scorching hot over the last year, gaining nearly 70% thanks to demand stemming from the AI infrastructure buildout.

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Image Source: Zacks Investment Research

The company announced a 3% increase to its quarterly payout, continuing a trend of higher payouts over the years. VST presently sports a 13% five-year annualized dividend growth rate, with its payout ratio sitting sustainably at 12% of its earnings. Below is a chart illustrating the company’s dividends paid on a quarterly basis.

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Image Source: Zacks Investment Research

Importantly, Vistra reaffirmed its current year guidance in its latest release in early May, providing a big sigh of relief to investors. The Q1 earnings cycle has largely been dictated by commentary for the upcoming periods, and VST cleared the critical hurdle.

Bottom Line

Dividends bring many great perks to investors, such as passive income and the ability to achieve maximum returns through dividend reinvestment.

Companies typically boost payouts when business is running smoothly, overall sending a positive message concerning the longer-term picture as well. In addition, consistently higher payouts owe to a company’s cash-generating abilities, undoubtedly a huge positive.

And for those seeking companies looking to pay their shareholders a higher paycheck, both companies above – Apple (AAPL - Free Report) and Vistra (VST - Free Report) – fit the criteria.


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