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Dividend Watch: 3 Companies Boosting Payouts

Shareholders can receive many positive announcements, such as upgraded guidance or news of a hot acquisition. Of course, dividend boosts are another one of these favorable announcements, with the news fully reflecting a shareholder-friendly nature.

And as of late, three companies – Altria MO, NetEase NTES, and Verizon Communications VZ – have all recently boosted their payouts. Let’s take a closer look at each for those interested in an income-focused approach.

Altria

Altria Group is a world-leading producer and marketer of cigarettes, tobacco, and other similarly related products. The company’s Board of Directors recently voted to increase its quarterly dividend by 4.3% to $0.98 per share.

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As shown below, Altria has a long history of increasing its dividend payout, reflecting its shareholder-friendly nature.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

The company’s shares aren’t valuation stretched, with the current 8.9X forward earnings multiple sitting well below the 10.1X five-year median and the Zacks – Tobacco industry average. The stock sports a Style Score of “B” for Value.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Altria is expected to post modest growth in its current year, with Zacks Consensus Estimates suggesting 3% earnings growth on 1% higher sales.

NetEase

NetEase, a current Zacks Rank #1 (Strong Buy), is an Internet technology company engaged in the development of applications, services, and other technologies for the Internet in China. Analysts have taken their earnings expectations higher across all timeframes.

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Zacks Investment Research


Image Source: Zacks Investment Research

The company recently announced an 11% increase to its quarterly dividend to $0.52 per share, compared to $0.47 per share previously.  As shown below, the company’s payout has grown nicely over the recent years, sporting a 26% five-year annualized dividend growth rate.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Verizon Communications

Verizon offers communication services in the form of local phone service, long-distance, wireless, and data services. The company recently announced a slight 2% boost to its quarterly payout, bringing the total to $0.65 per share.

Like those above, the company has shown a commitment to shareholders over the years, as illustrated below. VZ’s payout has grown by a modest 2% annually over the last five years.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

And the company generates ample cash to keep the dividend boosts coming, with VZ posting $5.6 billion in free cash flow in its latest quarter. It’s worth noting that the company’s top and bottom lines are forecasted to take hits in its current year (FY23), with estimates indicating 9% lower earnings on 2% lower sales.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Bottom Line

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

And recently, all three companies above – Altria MO, NetEase NTES, and Verizon Communications VZ – have boosted their payouts, reflecting their shareholder-friendly natures.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Verizon Communications Inc. (VZ) : Free Stock Analysis Report

Altria Group, Inc. (MO) : Free Stock Analysis Report

NetEase, Inc. (NTES) : Free Stock Analysis Report

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Zacks Investment Research