EQT Corporation (EQT), News Corp (NWSA), Mastercard Inc (MA): Do These Low-Yielding Companies Have Room for Dividend Growth?

Mastercard Inc (NYSE:MA)

Figures in $US Millions. Financing activities include dividend payouts, changes in capital stock, and the movement of debt.

Mastercard Inc (NYSE:MA) doubled its dividend payout during 2012 and has recently done so again to offer shareholders a quarterly payout of $0.60 a share, an annualized yield of 0.42%.

The higher payout of $0.60 per share is not reflected in the cash flows above, the Q1 payment for 2013 was $0.30, indicating that the Q2 payment of $0.60 will cost the company roughly $74 million — covered nearly ten times by operating cash flow after the deduction of investing activities.

Mastercard Inc (NYSE:MA)’s dividend payout has been covered on average 7.5 times by operating cash fallow after the deduction of investing activities during the last four quarters, indicating that the company has plenty of room to increase its dividend payout to investors in the future.

Verdict: plenty of dividend growth potential

Conclusion

Even after its recent dividend cut, EQT Corporation (NYSE:EQT) is still struggling to maintain its payout, so I believe that investors looking for future dividend growth potential should stay away from the company. On the other hand, Mastercard Inc (NYSE:MA) and News Corp (NASDAQ:NWSA) have strong cash flows with plenty of room to increase their shareholder returns and investors can look to both companies for future dividend growth potential.

The article Do These Low-Yielding Companies Have Room for Dividend Growth? originally appeared on Fool.com and is written by Rupert Hargreaves.

Fool contributor Rupert Hargreaves has no position in any stocks mentioned. The Motley Fool recommends MasterCard. The Motley Fool owns shares of MasterCard. Rupert is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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