In a shareholder-friendly move, Johnson Controls International plc (JCI Quick QuoteJCI - Free Report) has announced a hike in its dividend payout. JCI raised its quarterly dividend by 2.9% to 36 cents per share (annually: $1.44). The new dividend will be paid out on Apr 14 to shareholders of record as of Mar 20.

The move underscores Johnson Controls’ sound financial health as it utilizes free cash flow to enhance its shareholders’ returns. The company has been paying a consecutive dividend since the year 1887.

The dividend yield, based on the new payout and its Mar 8 closing price of $65.02, is 2.2%%.

Prior to this, Johnson Controls had hiked its dividends by 2.9% to 35 cents per share in March 2022.

Sound Capital-Allocation Strategies

Strong cash flows allow Johnson Controls to effectively deploy capital for making acquisitions, repurchasing shares and paying out dividends. In fiscal 2022 (ended Sep 30, 2022), the company repurchased 21.7 million shares for approximately $1.4 billion.

Also, in the first three months of fiscal 2023 (ended Dec 31, 2022), JCI repurchased and retired $154 million worth of shares. It rewarded its shareholders with $241 million via dividend payments. We believe such disbursements highlight the company’s operational strength and commitment to enhancing shareholders’ wealth.

Zacks Rank and Stocks to Consider

JCI currently carries a Zacks Rank #3 (Hold). Some better-ranked companies are discussed below:

Deere & Company (DE Quick QuoteDE - Free Report) presently sports a Zacks Rank #1 (Strong Buy). DE’s earnings surprise in the last four quarters was 4.7%, on average. You can see the complete list of today’s Zacks #1 Rank stocks.

In the past 60 days, Deere & Company’s earnings estimates have increased 8% for fiscal 2023. The stock has rallied 14% in the past six months.

Ingersoll Rand Inc. (IR Quick QuoteIR - Free Report) presently carries a Zacks Rank #2 (Buy). IR’s earnings surprise in the last four quarters was 8.5%, on average.

In the past 60 days, Ingersoll Rand’s earnings estimates have increased 3% for 2023. The stock has gained 18.4% in the past six months.

AGCO Corporation (AGCO Quick QuoteAGCO - Free Report) presently has a Zacks Rank of 2. AGCO’s earnings surprise in the last four quarters was 13.4%, on average.

In the past 60 days, AGCO’s earnings estimates have increased 2.2% for 2023. The stock has rallied 23.2% in the past six months.