Key Metrics for Determining Which Companies Are Likely to Increase Dividends

Shareholders of J.M. Smucker Co. (SJM) received a very early Christmas present last week as the company announced it was raising its dividend for the second time this year. The jelly and jam maker is joining a long list of other companies in an effort to disburse more cash to shareholders. By the time you are reading this, Smucker shares will already reflect the increased dividend, so the question is, “Who else will be increasing their dividend soon?” The short answer is lots. Barclays Capital’s Jeffrey Meli told Bloomberg last week that corporations are facing ‘ripe’ conditions to increase dividends and buy back stock after hoarding cash over the last few years. Once macroeconomic stability returns, companies will need to invest or spend some of the historic $1.9 trillion in cash they have amassed since the market’s meltdown. Meli figures this to happen in the third quarter, a view I... Read more