3 Industry Behemoths Are Rewarding Investors With Dividend Bumps

In a market where investors are increasingly seeking stability and reliable returns, several industry giants have stepped up with significant dividend increases. Johnson & Johnson (NYSE: JNJ), Costco Wholesale (NASDAQ: COST), and NASDAQ (NASDAQ: NDAQ) have each announced meaningful hikes to their quarterly payouts, reinforcing their commitment to shareholder value even amid broader market volatility. 

Below, we break down the details of each company's latest dividend move and what it could mean for investors.

Johnson & Johnson: +3% Yield With Over 60 Years of Increases

First up is the world’s largest pharmaceutical stock by revenue, Johnson & Johnson. On April 15, the company announced that it would raise its next quarterly dividend payment by 4.8%. The dividend will be payable on Jun. 10 to shareholders of record at the close of business on May 27. With a $5.20 annual indicated dividend, the stock now has a very strong indicated dividend yield of just under 3.4%.

This is considerably larger than the 1.3% indicated yield of the S&P 500 Index and is in the middle of the pack within a peer group of the world’s 20 largest pharmaceutical stocks.

Johnson & Johnson has a long history of returning capital and increasing its payouts over time. As a result of this increase, JNJ has boosted its dividend for 63 years. This increased commitment to return capital to shareholders comes even as JNJ grapples with tariffs likely to impact its business significantly. JNJ estimates that tariffs would cost the firm $400 million this year, mostly due to the impact on its medical technology business.

The company is also repurchasing stock, spending nearly $3.1 billion on share buybacks over the last 12 months, which is equal to around 0.8% of its market capitalization.

Costco Wholesale: Boosts Dividend, But Buybacks Are Its Distribution of Choice

Next up is another powerhouse in its industry, Costco Wholesale. The company is the world’s second-largest stock in the consumer staples sector. On April 16, the company announced that its next quarterly dividend would increase from $1.16 to $1.30 per share. This is a very notable dividend increase of about 12%. The new dividend is payable May 16 to shareholders of record at the close of business on May 2.

The company’s indicated annual payment is $5.20 now. However, with a share price approaching $1,000, the company’s dividend yield is relatively low. The figure going forward sits at just over 0.5%.

This yield is especially low for the consumer staples sector. The 20 largest stocks in this sector have an average indicated dividend yield of around 3.3%. The firm’s return of capital strategy revolves mainly around share buybacks. The company has spent nearly $3.8 billion on buybacks over the last 12 months.

This results in a buyback yield of nearly 6.5%, the highest figure among the 20 largest consumer staples stocks. The company also sometimes uses large special dividends to distribute capital back to shareholders. It paid a special dividend four times over the past ten years: in 2023, 2020, 2017, and 2015.

NASDAQ: Stock Exchange Giant Lifts Dividend by Double Digits

Last up is NASDAQ, which announced a 13% increase to its quarterly dividend on Apr. 24. The company is a leader in the stock market exchange industry. Data from Aug. 2023 shows that the exchange was the second largest in the world based on the combined market capitalization of the stocks trading on it. At that time, nearly $22 trillion in market cap was listed on the NASDAQ.

NASDAQ’s new $0.27 dividend is payable on June 27 to shareholders of record at the close of business on June 13. Now, the stock has an indicated dividend yield of approximately 1.4%.

The firm has also been using share buybacks, spending $260 million on repurchases since the beginning of 2024. This represents just 0.6% of the company’s market capitalization. However, it still has a lot of buyback capacity, with $1.6 billion. This is equal to around 3.7% of the company’s market cap. The firm has also been doing a good job of reducing its debt, achieving a debt paydown yield of nearly 2% over the last 12 months.

Overall, these three firms continue to make substantial progress on their journeys to return more capital to shareholders. This is a welcome sign of stability, as markets have been shaky lately.

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