Wal-Mart Stores, Inc. (WMT), Caterpillar Inc. (CAT): Are These Dividend Hikes Enough?

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The stock has increased 111% over the last five years, making its large dividend hikes, icing on the cake. Overall, this is a balanced company that has performed well regardless of the market, trading just 42% as volatile as the S&P 500, making it an intriguing buy to me.

Drilling Up Profits And Giving Back To Investors

Although I can’t be certain, I don’t believe there is any other company in the market that has increased its dividend yield by 1,000% over the last five years, except for Helmerich & Payne, Inc. (NYSE:HP). In my opinion, Helmerich & Payne, Inc. (NYSE:HP) is the quintessential dividend play in the energy space.

Helmerich & Payne, Inc. (NYSE:HP) has a massive fleet of rigs – most of which are U.S. based – and the company charges a hefty premium for its high-performance rigs. Over the last few years, the U.S. has placed an emphasis on domestic oil production, and is expected to increase oil production even more in upcoming years. Therefore, it is encouraging that Helmerich & Payne, Inc. (NYSE:HP) owns 330 land rigs with 296 being in the U.S. Thus, with demand increasing, and Helmerich & Payne, Inc. (NYSE:HP) having great supply and pricing power, I think it is a great investment moving forward.

Final Thoughts

Just because a company boosts its dividend doesn’t mean that it’s a good investment. An increased dividend should be viewed as a bonus on top of fundamental performance. While Target appears to be a safe and reliable company, it presents nowhere near the value as in shares of Helmerich & Payne or Allied World Assurance Co Holdings, AG. (NYSE:AWH). In my opinion, Caterpillar Inc. (NYSE:CAT) presents too many risks to be a substantial dividend play, thus I’d go with the two noted stocks above.


Brian Nichols is long HPA The Motley Fool has no position in any of the stocks mentioned.
Brian is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

The article Are These Dividend Hikes Enough? originally appeared on Fool.com is written by Brian Nichols.

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