According to S&P Dow Jones Indices data, some 935 companies boosted their dividend payouts in the first four months of 2013, 32% more than in the same quarter a year earlier. The tally for the first four months of this year was also the highest in at least a decade. This is a result of strong corporate cash flow generation that is allowing companies to return increasing amounts of cash to their shareholders.
Among the notable dividend growers is a group of companies that are raising dividends at double digits. Among them, only a few companies are increasing payouts by 20% or more, including a couple of asset managers, namely Invesco Ltd. (NYSE:IVZ) and Lazard Ltd (NYSE:LAZ). Here is a closer look at these two and three other dividend-paying stocks yielding more than 2% and raising dividend payouts by 20% or more.
Invesco Ltd. (NYSE:IVZ), an investment manager, recently boosted its quarterly payout by 5.25 cents to 22.5 cents per share. The dividend hike reflects the asset manager’s robust EPS growth over the past half-decade and the company’s assessment of a “strengthening trend of (its) business fundamentals.” Analysts expect a solid EPS expansion for the next five year, with EPS growth averaging 15.3% annually. In the previous quarter, the company saw a 10.9% increase in net revenues from the year earlier, driven by solid growth in investment management fees. Its quarterly adjusted EPS was up 18.2% from the prior year.
Assets under management (AUM), which averaged nearly $713 billion in the quarter, were 8.3% higher year-over-year. Its AUM continued to expand in April. The stock offers capital appreciation potential based on its top line growth, which is bolstered by better performance and higher fee rates. However, some of that growth is already priced in, as the stock trades at 15.3x forward earnings, marginally below its peers as a group. In the December quarter, the stock was popular with hedge fund manager Richard S. Pzena.
Lazard Ltd (NYSE:LAZ), another asset manager, recently hiked its quarterly payout by 5 cents to 25 cents per share. The company’s financial performance lagged in the previous quarter, with its revenues and profits declining amidst dismal financial advisory revenues. Aided by capital appreciation, Lazard Ltd (NYSE:LAZ)’s AUM grew 10% year-over-year to $172 billion at the end of the March quarter. In its asset management business, Lazard Ltd (NYSE:LAZ) derives nearly half of its AUM from clients based outside of North America.