Corporate executives have an ability to send ‘signals’ to the market about the health of their organization. One such signal is dividend policy.
In particular, if a company increases its dividend – particularly in a bad economic environment – it signals management’s confidence in the company’s future prospects. It also indicates the company has the cash to continue paying its dividend.
If I’m going to invest in a company right now, I want to know that the company’s executives are confident. While I wouldn’t rely on this single factor to make an investing decision, I believe it provides good corroborating evidence for an investing thesis that might already exist.
May of 2020 was one of the worst months ever for the US economy. Yet there are a handful of large cap US companies that are increasing their dividends, which I have listed below:
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May Dividend Increases (US Companies with Market Cap >$10b)
|Company||Ticker||New Div||% Raise||Yield|
|KKR & Co||KKR||$0.14||8.00%||2.00%|
|FactSet Research Systems||FDS||$0.77||6.94%||1.20%|
|Expeditors Intl of Washington||EXPD||$0.52||4.00%||1.40%|