5 Companies Going Ex-Dividend Next Week You Should Consider
By: Ned Piplovic,
In times of market volatility like we have experienced over the last few weeks, some investors look to shift some of their portfolio quickly towards more stable-performing equities, like few of the relatively reliable companies going ex-dividend next week.
These equities might grow at lower rate in high bull markets. However, these equities are also more likely to get through troubled markets without high volatility and might even deliver decent returns from a combination of capital gains and income distributions. The list below contains five companies going ex-dividend next week that investors looking to protect a portion of their portfolio from current volatility should consider.
Any equity analysis can be made very complex to increase the likelihood of selecting the best stock picks for a particular investment strategy. Many service providers and financial advisory sites offer a selection of tools, such as the Dividend Screener tool available at DividendInvestor.com. However, the selection of the five equities on the list below involved just two criteria — ex-dividend dates between August 21 and August 27, 2019, as well as streaks of consecutive annual dividend hikes of at least five years. The highest streak among these equities is 57 consecutive years.
Sorted by dividend yield in ascending order, below are the five companies going ex-dividend next week you should consider.
5 Companies Going Ex-Dividend Next Week You Should Consider: #5
Discover Financial Services (NYSE:DFS)
Discover Financial Services began dividend distributions in the last quarter of 2007 — just before the financial crisis. After just six quarters of dividend distributions, the company had to cut its quarterly payout by two-thirds for the second quarter of 2009. Then, the company paid a minimal dividend of $0.02 for eight consecutive quarters. However, after resuming dividend hikes in 2011, the company has boosted its annual distribution amount payout every year over the last nine consecutive years.
The current $0.44 quarterly dividend payout is 10% higher than the $0.40 distribution amount one year earlier. Since resuming dividend hikes in 2011, the company has advanced its total annual distribution amount 22-fold. This level of dividend advancement corresponds to an average growth rate of 41% per year.
The current quarterly payout amount is equivalent to a $1.76 annualized distribution and yields 2.22%. The company’s current yield is 15% higher than the company’s own 1.93% five-year average yield.
While the share price decline in 2015 limited the five year total return to a still respectable 46%, shareholders enjoyed better total returns more recently. The one-year total return was 14% and the three year total return exceeded 50%.
5 Companies Going Ex-Dividend Next Week You Should Consider: #4
Skyworks Solutions, Inc. (NASDAQ:SWKS)
Skyworks Solutions — a manufacturer and distributor of proprietary semiconductor products — began distributing dividends to its shareholders only in 2004. However, after boosting its annual dividend distribution every year, Skyworks advanced its total annual dividend amount nearly four fold in just five years. This advancement pace corresponds to an impressive average annual growth rate of nearly 31% per year.
The company’s current dividend boost raised the quarterly distribution almost 16% from $0.38 in the previous period to the current $0.44 dividend payout per share. This quarterly payout amount is equivalent to a $1.76 annualized distribution and a 2.32% forward dividend yield.
The share price experienced a small pullback over the trailing 12 months, which pushed the current yield 70% above the company’s own five-year average yield of 1.36%. Additionally, the share price decline also drove the current yield to outperform the 1.05% average yield of the overall Technology sector by 120%. The price drop also pushed the current yield to 320% above the 0.55% simple average yield of the Semiconductor — Integrated Circuits industry segment. Moreover, the current yield is also double the 1.18% average yield of the segment’s only dividend-paying equities.
The rising dividend income payouts were insufficient to offset the 17% share pullback over the trailing 12-month period. However, despite the double-digit percentage one-year loss, Sky works delivered 22% total returns over the last three years and a 56% total return over the last five years.
5 Companies Going Ex-Dividend Next Week You Should Consider: #3
Johnson & Johnson (NYSE:JNJ)
The company’s current $0.95 dividend payout is 5.6% higher than the $0.90 distribution from the same period last year. This new quarterly dividend amount is equivalent to a $3.80 annualized distribution for full-year 2019 and a 2.92% forward dividend yield. The current yield is nearly 11% higher than JNJ’s own 2.63% average yield over the last five years.
Moreover, JNJ’s current 2.92% yield is 420% higher than the 0.56% simple average yield of the entire Health Care sector. Additionally, JNJ’s current yield also outperformed the 1.92% simple average yield of the Major Drug Manufacturers market segment by 52%.
Over the past two decades, JNJ enhanced its annual dividend payout nearly seven-fold, which is equivalent to a 10% average annual growth rate. The average annual dividend growth rate has dropped in the more recent years and averaged 6.4% over the past five years.
Johnson & Johnson rewarded its shareholders with dual gains from dividend income and capital gains for a 6% total return over the trilling 12-month period and 17% over the last three years. Over the last five years, JNJ delivered a total return of 47%.
5 Companies Going Ex-Dividend Next Week You Should Consider: #2
Target Corporation (NYSE:TGT)
Currently, Target pays a $0.66 quarterly payout, which is 3.1% higher than the $0.64 distribution from the previous period. The new quarterly amount corresponds to a $2.64 annualized dividend distribution and yields 3.22%, which is just marginally ahead of the company’s 3.19% five-year average yield.
Additionally, the current yield is nearly 50% higher than the 2.17% average yield of the overall Services sector. Moreover, Target’s current yield is 132% higher than the 1.39% simple average yield of Targets’ peers in the Discount & Variety Stores industry segment, as well as nearly 40% higher than the 2.32% yield average of the segment’s only dividend-paying companies.
With a streak of 47 consecutive annual dividend hikes, Target maintained its dividend growth strategy. Over the past two decades, the company has enhanced its annual dividend amount 13-fold, which corresponds to an average annual growth rate of 13.2%.
Dividend income and asset appreciation combined for a 6% total return over the trailing 12 months, 21% over three years and 65% over the last five years
5 Companies Going Ex-Dividend Next Week You Should Consider: #1
Cummins, Inc. (NYSE:CMI)
Cummins will boost its quarterly dividend payout amount 15% from the current $1.14 per share amount to the $1.311 payout for the next round of dividend distributions. The quarterly payout amount corresponds to a $5.24 annualized dividend and a 3.63% forward dividend yield, which is 27% higher than the company’s own 2.85% five-year yield average. Additionally, Cummins’ current yield is also 185% higher than the 1.28% simple average yield of the entire Industrial Goods sector and the 1.27% average yield of its peers in the Diversified Machinery segment.
The company has been paying a dividend for nearly seven decades and has hiked its annual distribution for the last 14 consecutive years. Over that period, Cummins enhanced its annual dividend payout amount more than 17-fold, which is equivalent to an average dividend growth rate of nearly 23% each year.
The share price lost nearly 45% in 2015, which limited the five-year total returns to just 20%. However, assisted by the share price resurgence, the total return over the trailing 12 months is more than 11% and the total return over the past three years is 30%.
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Ned Piplovic is the assistant editor of website content at Eagle Financial Publications. He graduated from Columbia University with a Bachelor’s degree in Economics and Philosophy. Prior to joining Eagle, Ned spent 15 years in corporate operations and financial management. Ned writes for www.DividendInvestor.com and www.StockInvestor.com.