Five dividends are expected to see significant increases as the Federal Reserve cuts interest rates, leading to a boost in stock prices. Starbucks has seen significant growth in both stock prices and dividends since 2010 when they started paying dividends. The correlation between dividend hikes and stock prices rising can be observed in many companies, including Starbucks. With the Federal Reserve cutting interest rates, the yields on bonds and bond funds are expected to decrease, making dividend stocks more attractive to investors.
Marriott International, one of the five stocks, is set to announce a dividend increase in mid-May, with a 73% increase in dividends expected. The hotelier has seen a resurgence in its business post-COVID, leading to strong dividend growth. Penske Automotive Group, which operates automobile dealerships internationally, is another stock with a projected dividend increase in mid-May. Despite a brief suspension of dividends in 2020, Penske has continued to raise its dividends consistently over the years.
The First Bancshares, a bank holding company, is expected to announce a dividend increase in late May, with a 22% increase in dividends expected. The company has been expanding its business through mergers and acquisitions, leading to a significant increase in dividends. AGCO Corp, a leading agricultural machinery producer, is set to announce a dividend increase in late April. Despite concerns about the industry entering a downcycle, AGCO has provided robust guidance for 2024.
Energy Transfer, responsible for a significant portion of America’s energy infrastructure, is expected to announce a dividend increase in late April. With a dividend yield of 8%, Energy Transfer has been focusing on reducing leverage and making strategic investments to capitalize on rising U.S. production. While the company halved its payout during COVID, it has since been increasing dividends consistently. Income investors are advised to pay attention to the pacing of dividend growth when the company announces its next dividend action.
Overall, these five stocks are expected to see significant dividend increases in the coming months, making them attractive investment opportunities for income investors. The correlation between dividend growth and stock price performance is evident in these companies, highlighting the importance of dividends as a driver of stock prices. Investors are advised to consider these stocks before the broader investing herd catches on to their potential for growth.
