Alcoa Inc (AA), Bank of America Corp (BAC), Intel Corporation (INTC): These Dow Dividends Need a Boost

Page 1 of 2

For the most part, the 30 stocks in the Dow Jones Industrials have a good track record in treating dividend investors right. All 30 Dow components pay a dividend, and the vast bulk of those companies are in the habit of giving their shareholders regular dividend increases on an annual basis.

But a few laggards within the Dow haven’t lived up to that standard of dividend excellence. Let’s take a look at the four stocks within the Dow that haven’t increased their payouts in over a year.

Alcoa Inc (NYSE:AA)

Alcoa Inc (NYSE:AA) has gone the longest without a dividend increase, with its last payout raise coming in January 2007. In the aftermath of the financial crisis, the aluminum giant had to cut its dividend by more than 80%, and ever since, Alcoa Inc (NYSE:AA) hasn’t managed to improve on its $0.03 per share quarterly payout. Even with that modest dividend that yields 1.6%, Alcoa Inc (NYSE:AA)’s payout ratio approaches 100%. Moreover, the aluminum industry remains tenuous right now, as the threat of changing warehouse regulations threatens to unleash new supply in an environment that’s already struggling from low prices. Investors shouldn’t expect a dividend raise anytime soon.

Bank of America Corp (NYSE:BAC) has the smallest dividend payout in the Dow, yielding just 0.3% with its penny-per-share quarterly payout. Its last dividend increase came in September 2007, and the bank subsequently slashed its distribution twice in late 2008 and early 2009 in order to conserve money and comply with TARP bailout requirements. With the stock having passed the Fed’s stress tests earlier this year, investors expected that a long-awaited dividend increase might be forthcoming, but the company decided instead to implement a buyback and save a future dividend hike until after the bank’s capital condition had improved further.

United Technologies Corporation (NYSE:UTX) hasn’t gone nearly as long since raising its dividend, with its last increase having come in June 2012. The company has a long history of boosting its payout on an unusual schedule of every five quarters, having done so since 2003. By that measure, the next increase should come next month, with a potential raise to somewhere around $0.59 or $0.60 per share potentially raising the stock’s yield to about 2.3%. With the company having taken on a sizable financial burden in buying out Goodrich last year, though, it’s possible that United Technologies Corporation (NYSE:UTX) will keep its dividend unchanged in order to reduce its debt more quickly.

Finally, Intel Corporation (NASDAQ:INTC) hasn’t had a dividend increase since August 2012, having paid the same dividend for five straight quarters. Unlike United Technologies Corporation (NYSE:UTX), Intel Corporation (NASDAQ:INTC) has tended to stick to a four-quarter schedule for its payout hikes, although it has occasionally gone for longer periods without a dividend increase. Throughout much of 2008 and 2009, for instance, the company kept its payout unchanged. Given the challenges that Intel Corporation (NASDAQ:INTC) has had in expanding its PC dominance to cover the growing mobile market, it’s possible that Intel Corporation (NASDAQ:INTC) is saving its considerable cash hoard for a major strategic move.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

The 10 Richest Stand Up Comedians in the World

The 10 Fattest Countries in the World

The 5 Best Summer Jobs for Teens

The 10 Most Religious Countries in the World Keeping the Faith

The 10 Most Educated Countries in the World

The 10 Most Popular Cell Phones in the World

The 10 Drunkest Countries in the World

The 10 Most Expensive Private Schools in the World

The 10 Smallest Countries in the World

Walking Dead Season 5 Spoilers You’ll Wish You Didn’t Know

The 10 Poorest Countries in the World

The 10 Greenest Countries in the World

The Top 10 Countries with the Highest Population in the World

The 10 Most Visited Countries in the World

The Top 10 Star Wars Characters in the Iconic Series

The 10 Most Expensive Android Phones in the World

5 Reasons Why The Illuminati Is Real and a Threat to Society

The 6 Scariest Halloween Costumes Ever Screamed At

The 4 Biggest Hedge Fund Managers in the World Today

The 15 Most Densely Populated Countries in the World

The 10 Biggest Tea Drinking Countries in the World

Top 6 Ways to Improve Your Checkout Process and Close Sales

The 5 Most Profitable Online Businesses You Can Start Today

The 20 Most Profitable Hospitals in the US

The 5 Most Profitable Home Businesses to Start

The 7 Teams that Will Win the Stanley Cup in 2015

The Top 10 Most Expensive Digital Cameras to Snap Stunning Shots With

The 10 Highest Quality Fast Food Restaurants In America Today

The 8 Best Halloween Decorating Ideas to Spook Up Your House

10 Marvel Women that Should Get a Movie Right Now

The 20 Best Remixes of Popular Songs that Will Make You Forget the Originals

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

50 Crazy Facts About Japan You Won’t Believe

Top 10 Least Expensive Hybrid Cars to Save the Planet With

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

The 10 Best Value Investment Blogs that Every Investor Must Read

The 6 Cheapest Boarding Schools in Europe 2015

The 5 Most Expensive Cars To Insure in the World

The 10 Most Common Genetically Modified Foods

10 Self-Made Billionaires Who Came From Nothing

The 10 Most Expensive Cities to Live in North America

The 13 Most Expensive Headphones in the World to Represent

The Top 20 Wealthiest Soccer Teams in 2014

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!