(This article was originally published on Dividend Stock Advisor at 11:00 a.m. ET.)
This Alert is a recap of some of the major dividend increases in the market this week.
Caterpillar (CAT) raised its quarterly dividend 10% on June 10 to $0.77 a share (3.5% yield). Investors at the close of trading on July 15 will qualify for the payment on Aug. 20. Management has increased the payout six-straight years and the dividend will be covered just 1.5x with expected 2016 earnings of $4.76 a share.
While Caterpillar's yield is more than a full percentage point higher than both the average payout of the S&P 500 index and the benchmark, 10-year U.S. Treasury note, the company's earnings are expected to decline the next two years. As a result, we believe that income investors should focus elsewhere.
FedEx (FDX) boosted its quarterly dividend 25% on June 8, to $0.25 a share (0.5% yield). Investors at the close of trading on June 15 will qualify for the payment on July 2. Management has raised the payout six-straight years and the dividend can be covered with just 9% of expected fiscal 2016 (ending May) earnings of $10.92 a share.
The company's payout is dwarfed by the 2.9% dividend offered by chief competitors UPS (UPS). That said, FedEx will announce quarterly results on June 17 and many market watchers expect that management will boost earnings guidance.
Target (TGT) increased its quarterly dividend 8% on June 9 to $0.56 a share (2.8% yield). Investors at the close of trading on Aug. 14 will qualify for the payment on Sept. 10. Management has raised the payout 44 consecutive years and the dividend can be covered 2.1x with expected fiscal 2016 (ending January) earnings of $4.61 a share. In addition, the retailer added $5 billion (62.5 million shares) to its stock buyback program.
Target is a core holding in Jim Cramer's charitable trust Action Alerts PLUS.
Finally, here is a lookahead to some of the upcoming must-own dates for key dividends next week:
June 15: FedEx and Tupperware (TUP).
June 16: Advance Auto Parts (AAP), DSW (DSW) and General Electric (GE).
June 17: Las Vegas Sands (LVS) and Tiffany (TIF).