Judging by the company’s strong performance to start the year as well as its recent track record of payout raises, there’s enough precedent to assume a double-digit payout increase is in the offing.
Investors should take note that United Technologies Corporation (NYSE:UTX) traditionally raises its payout every five quarters instead of the usual four. The company’s fifth static dividend payment has recently been declared, so it’s the next quarterly payout that should be increased.
Last but not least, electronics retailer Best Buy Co., Inc. (NYSE:BBY) is due for a dividend increase. Best Buy Co., Inc. (NYSE:BBY)’s struggles have been well-publicized, from its struggles with the ‘show-rooming’ effect to its failed attempt to be taken private.
Best Buy Co., Inc. (NYSE:BBY)’s sales and profits have declined in recent periods, as evidenced by the company’s 1% drop in fiscal 2013 revenue, but one thing that has kept climbing higher is the company’s dividend.
Best Buy Co., Inc. (NYSE:BBY) has raised its dividend in time for its September payout in each of the last three years. Last fall, Best Buy gave its investors a 6% pay raise.
That’s because despite the retailer’s struggles, Best Buy Co., Inc. (NYSE:BBY) continues to churn out solid free cash flow. As a result, it’s prudent for investors to expect another one cent per-share dividend increase, which would represent a nearly 6% raise.
The window into a company’s soul
Dividends are, quite simply, one of the purest views into the health of any company. Management expectations for the future are imbedded into dividend changes. A company that raises (or cuts) its shareholder distribution is sending a clear signal to investors about the likely health (or struggles) of its business over the coming months.
That’s why investors should pay attention to each of these stocks over the next few weeks. Each is due to increase its dividend as they have this time of year for many years in a row. Investors of each of these companies will be given a fairly straightforward view of overall business conditions at Altria Group Inc (NYSE:MO), United Technologies Corporation (NYSE:UTX), and Best Buy.
Assuming each company delivers solid dividend increases, investors should feel good about their future prospects. Pay close attention to what happens to these stocks’ distributions, and don’t hesitate to base your decision to buy or not based in large part on what happens to their dividends.
Robert Ciura owns shares of Altria Group. The Motley Fool has no position in any of the stocks mentioned. Robert is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
The article Why You Should Consider Buying These Stocks Before Their Imminent Dividend Increases originally appeared on Fool.com is written by Robert Ciura.
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