7 Dividend Stocks That Want to Pay You More Money
Even though the broad market is testing its post-recession highs this week, investors are still focused on income, and for good reason. It's earnings season, after all, a time that holds special significance for income investors: It's the period each quarter when companies announce their profits to Wall Street, as well as the dividends that those profits are paying for.
This year, the first quarter of earnings is looking especially attractive.
That's because even though stocks are testing those highs from last April, corporate profits are around 9% higher than they were at that time last year. Dividend growth has outpaced even that in the last 12 months -- payouts to shareholders are up around 16% in the last year. The result is a bargain opportunity in U.S. stocks right now.
And dividend payers look like some of the best bargains out there. That's because, historically, their payouts account for the lion's share of investors' returns. That's why we're taking a closer look at seven dividend stocks raising their payouts in February.
Over the last 36 years, dividend stocks have outperformed the rest of the S&P 500 by 2.5% annually, and they outperformed nonpayers by nearly 8% every year, all while paying out cash to their shareholders, according to data compiled by Ned Davis Research. The numbers are even more compelling when looking at companies that consistently increase their payouts.
That's why we pay close attention to the firms that are shoveling more corporate cash to shareholders each week. With that, here's a look at seven of the stocks that hiked payouts in the last week .
The past year has shown some stellar performance for retailer TJX (TJX) , the firm behind chains such as T.J. Maxx, Marshall's and HomeGoods. Shares of the firm have rallied more than 43% in the last 12 months, spurred on by fundamental success in its brick-and-mortar stores.
On Wednesday, management announced a 21% increase in its quarterly dividend, bringing it to 11.5 cents per share. That's the 16th straight year of dividend hikes for TJX shareholders.
TJX is a league leader in off-price retail. The firm's stores stock major brand name clothing, accessories and housewares at prices that are fairly dramatic discounts to their retail costs, a model that's proven popular in the shadow of a major global recession.
TJX has reasonable pricing power with consumers -- if retail prices rise, so too can the discounted price tags on TJX's shelves. At the same time, full-price retailers need TJX because the firm is willing to buy massive swaths of excess inventory.