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4 Stocks to Watch on Dividend Hikes as Inflation Softens
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The U.S. economy wobbled after the sudden failure of Silicon Valley Bank, followed by Signature Bank and the takeover of Credit Suisse by its European rival UBS. The aftershock of these events have again raised the question of whether the economy will make a soft landing or slide into recession.
Inflation continues to show signs of cooling off and is at the lowest point seen in the past two years. The Consumer Price Index for the month of March came in at 5% year over year mostly driven by lower energy prices. This could give the Federal Reserve some room to make favorable interest rate adjustments. The Dow, the S&P 500 and the Nasdaq have gained 2.50%, 8.21% and 16.12%, respectively, so far this year.
Retail sales fell for two consecutive months and dropped by 1% in March. This implies that Americans bought fewer cars, clothes and pieces of furniture. Manufacturing PMI, dropped to 46.3%. Fed’s aggressive rate hike stance to fight inflation has increased the cost of borrowing and dented the pockets of the average Americans and businesses. However, the domestic labor market remained strong, adding more than 1 million jobs over the past three months and driving away unemployment.
Geopolitical tension continues to create energy crisis and supply-chain challenges, which remain major threats to a business. Thus, investors looking for regular income and capital preservation can invest in mature businesses, which pay out regular dividends. Amid adverse economic conditions, these stocks remain profitable due to their proven business models.
Companies, which tend to reward investors with a high dividend payout, outperform non-dividend-paying stocks during market volatility. Investors can expect a regular flow of income in volatile market conditions.
On that note, let us look at companies like Aon (AON - Free Report) , Sensata Technologies Holding (ST - Free Report) , Targa Resources (TRGP - Free Report) , and AnheuserBusch InBev (BUD - Free Report) which have lately hiked their dividend payouts.
Aon is a Dublin, Ireland-based company. This Zacks Rank #3 (Hold) companyoffers risk management services, insurance and reinsurance brokerage, human resource consulting and outsourcing services worldwide.
On Apr 14, AON declared that its shareholders would receive a dividend of 62 cents a share on May 15. AON has a dividend yield of 0.67%.
Over the past five years, AON has increased its dividend six times, and its payout ratio at present sits at 17% of earnings. Check Aon’s dividend history here.
Targa Resources is a premier energy infrastructure company. This Zacks Rank #3 company owns, operates, acquires, and develops a portfolio of complementary domestic midstream infrastructure assets in North America.
On Apr 13, TRGP announced that its shareholders would receive a dividend of 50 cents a share on May 15, 2023. TRGP has a dividend yield of 1.82%.
AnheuserBusch InBev is a global brewing company with more than 500 iconic brands. This Zacks Rank #3 company produces, distributes, markets, and sells beer and beverages.
On Apr 12, BUD declared that its shareholders would receive a dividend of 61 cents a share on Jun 8, 2023. BUD has a dividend yield of 0.61%.
Image: Bigstock
4 Stocks to Watch on Dividend Hikes as Inflation Softens
The U.S. economy wobbled after the sudden failure of Silicon Valley Bank, followed by Signature Bank and the takeover of Credit Suisse by its European rival UBS. The aftershock of these events have again raised the question of whether the economy will make a soft landing or slide into recession.
Inflation continues to show signs of cooling off and is at the lowest point seen in the past two years. The Consumer Price Index for the month of March came in at 5% year over year mostly driven by lower energy prices. This could give the Federal Reserve some room to make favorable interest rate adjustments. The Dow, the S&P 500 and the Nasdaq have gained 2.50%, 8.21% and 16.12%, respectively, so far this year.
Retail sales fell for two consecutive months and dropped by 1% in March. This implies that Americans bought fewer cars, clothes and pieces of furniture. Manufacturing PMI, dropped to 46.3%. Fed’s aggressive rate hike stance to fight inflation has increased the cost of borrowing and dented the pockets of the average Americans and businesses. However, the domestic labor market remained strong, adding more than 1 million jobs over the past three months and driving away unemployment.
Geopolitical tension continues to create energy crisis and supply-chain challenges, which remain major threats to a business. Thus, investors looking for regular income and capital preservation can invest in mature businesses, which pay out regular dividends. Amid adverse economic conditions, these stocks remain profitable due to their proven business models.
Companies, which tend to reward investors with a high dividend payout, outperform non-dividend-paying stocks during market volatility. Investors can expect a regular flow of income in volatile market conditions.
On that note, let us look at companies like Aon (AON - Free Report) , Sensata Technologies Holding (ST - Free Report) , Targa Resources (TRGP - Free Report) , and AnheuserBusch InBev (BUD - Free Report) which have lately hiked their dividend payouts.
Aon is a Dublin, Ireland-based company. This Zacks Rank #3 (Hold) company offers risk management services, insurance and reinsurance brokerage, human resource consulting and outsourcing services worldwide.
On Apr 14, AON declared that its shareholders would receive a dividend of 62 cents a share on May 15. AON has a dividend yield of 0.67%.
Over the past five years, AON has increased its dividend six times, and its payout ratio at present sits at 17% of earnings. Check Aon’s dividend history here.
Aon plc Dividend Yield (TTM)
Aon plc dividend-yield-ttm | Aon plc Quote
Sensata Technologies Holding is a global industrial technology company. This Zacks Rank #3 company develops, manufactures and sells innovative sensor-based solutions. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
On Apr 13, ST declared that its shareholders would receive a dividend of 12 cents a share on May 24, 2023. ST has a dividend yield of 0.93%.
Over the past five years, ST has increased its dividend one time, and its payout ratio presently sits at 13% of earnings. Check Sensata Technologies Holding’s dividend history here.
Sensata Technologies Holding N.V. Dividend Yield (TTM)
Sensata Technologies Holding N.V. dividend-yield-ttm | Sensata Technologies Holding N.V. Quote
Targa Resources is a premier energy infrastructure company. This Zacks Rank #3 company owns, operates, acquires, and develops a portfolio of complementary domestic midstream infrastructure assets in North America.
On Apr 13, TRGP announced that its shareholders would receive a dividend of 50 cents a share on May 15, 2023. TRGP has a dividend yield of 1.82%.
Over the past five years, TRGP has increased its dividend two times. Its payout ratio now sits at 36% of earnings. Check Targa Resources’ dividend history here.
Targa Resources, Inc. Dividend Yield (TTM)
Targa Resources, Inc. dividend-yield-ttm | Targa Resources, Inc. Quote
AnheuserBusch InBev is a global brewing company with more than 500 iconic brands. This Zacks Rank #3 company produces, distributes, markets, and sells beer and beverages.
On Apr 12, BUD declared that its shareholders would receive a dividend of 61 cents a share on Jun 8, 2023. BUD has a dividend yield of 0.61%.
In the past five-year period, BUD has increased its dividend four times. Its payout ratio at present sits at 12% of earnings. Check AnheuserBusch InBev’s dividend history.
Anheuser-Busch InBev SA/NV Dividend Yield (TTM)
Anheuser-Busch InBev SA/NV dividend-yield-ttm | Anheuser-Busch InBev SA/NV Quote