Many investors think of dividend-paying companies as boring, low-return investment opportunities. Compared to high-flying small cap companies, whose volatility can be pretty exciting, dividend-paying stocks are usually more mature and predictable. Though this may be dull for some, the combination of a consistent dividend with an increasing stock price can offer earnings potential powerful enough to get excited about. Once a company makes a profit, management must decide on what to do with those profits. They could continue to retain the profits within the company, or they could pay out the profits to the owners of the firm in the form of dividends.
Once the company decides on whether to pay dividends they may establish a somewhat permanent dividend policy, which may in turn impact on investors and perceptions of the company in the financial markets. What they decide depends on the situation of the company now and in the future. It also depends on the preferences of investors and potential investors. The good part about the dividend growth strategy is that investors receive cash in their brokerage accounts from their dividend paying stocks. This allows them to have the necessary resources available for opportunities present during recessions for example.
The following stocks have raised dividends each year for several years in a row.
Freeport-McMoRan Inc (NYSE:FCX) traded 36,587,488 shares on last trading session with closing price of $12.02.
FCX was trading -29.54% below its 52-week high and 30.09% above its 52-week low. Its last 5-Year EPS growth stands at -21.20%; with earnings growth of 104.00% yoy. The stock stands -7.24% below the average-price of 50 days and -7.11% compared with the SMA 20.
The stock has a 1-year performance up 0.08% and a negative weekly performance at -10.96%. Moreover, the stock is down -9.21% in one month through last close, to $12.02, showing a -28.62% return during the past three months. The company is set at a mean analysts’ recommendation of 2.90.
FCX has been paying dividends since 1994 and has raised their dividend for 0 consecutive years. It has a dividend yield of 0.00% and a 5 year dividend growth rate of -15.89%. Their payout ratio is 58.00%.
Wells Fargo & Co (NYSE:WFC) shares moved to $54.85 after opening the day at $54.01, on Wednesday. The stock floated in a price range of $53.95 to $54.89, with market capitalization of $274.87B. The stock exchanged hands with 15,721,433 shares lower as compared to its average daily volume of 17.98M shares. If we take a look on its volatility, 1.43 percent was seen in a week and for the month it was 1.69 percent.
The company’s net profit margin stands at 37.00% whereas its return on equity (ROE) is 11.50%. It has 5.00B of outstanding shares and its shares float measured at 5.00B. The average analysts gave this company a mean recommendation of 2.60.
WFC first paid dividend in 1939 and has increased their dividend for 6 straight years. They have a dividend yield of 2.80% and a 5 year dividend growth rate of 18.50%.