Dividend Watch: 3 Companies Boosting Payouts

Everybody loves dividends, as they provide a passive income stream, limit drawdowns in other positions, and provide more than one way to profit from an investment.

And when considering dividend-paying stocks, those with a history of boosting their payout are prime considerations, reflecting their commitment to increasingly rewarding shareholders.

In addition, consistent dividend hikes reflect the company’s successful nature, opting to share profits with shareholders.

For those seeking companies that have recently boosted payouts, three large-cap companies – McKesson MCK, Cintas CTAS, and Comfort Systems USA FIX – fit the criteria. Let’s take a closer look at each.

McKesson Posts Record Sales

McKesson is a diversified healthcare services leader dedicated to advancing health outcomes for patients everywhere. The company is coming off a rock-solid quarterly release, with the company reporting not only record sales but also upping its full-year adjusted EPS outlook.

Adjusted EPS climbed 5% year-over-year, whereas record quarterly sales of $97.8 grew an impressive 23% from the year-ago period. The company topped off the robust results by announcing a 15% boost to its quarterly payout, reflecting its ninth consecutive year of increases.

While the company is still a while away from joining the elite Dividend Aristocrats group, the recent trend of boosting payouts nonetheless reflects broad business resiliency and capable management.

Cintas Remains Consistent

Cintas is similarly coming off a strong quarterly release, with the company exceeding both Zacks Consensus EPS and Sales estimates nicely. Revenue grew 8% year-over-year, whereas adjusted EPS was up a solid 9%.

The company’s consistent growth over its history has made it a cornerstone in many portfolios, with the company sporting a 20% five-year annualized dividend growth rate. Cintas announced a sizable 15% boost to its quarterly payout in the days that followed, further underpinning its resilience and cash-generating nature.

FIX Reflects AI Play

FIX shares represent a nice opportunity to obtain exposure to the AI infrastructure buildout thanks to its products utilized in data centers, which reflect a massive tailwind for the near and long-term picture for the stock.

FIX shares currently yield a respectable 0.3% annually. While the current yield may not be steep, the company’s 36% five-year annualized dividend growth rate helps bridge the gap nicely, underpinning its commitment to increasingly rewarding shareholders.

Bottom Line

Dividends bring about many great perks to investors, such as passive income and the ability to achieve maximum returns through dividend reinvestment.

Companies boost payouts when business is fruitful, overall sending a positive message concerning the longer-term picture. In addition, consistently higher payouts owe to a company’s cash-generating abilities, undoubtedly a huge positive.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research