Which of These 3 Names Will Win the 'Dividend Derby'?

This week, three large-cap companies -- Williams-Sonoma , Deere and Dick's Sporting Goods -- again boosted their quarterly dividends. Given that these kinds of companies have a track record of boosting their dividend payments to shareholders -- which suggests savvy management teams and growing businesses -- we can expect shares to move higher as rising dividend payments grow. Let's break down the three names, and see which one wins this round of the Dividend Derby. Williams-Sonoma: A Solid Build In addition to crushing July quarter earnings with revenue that soared more than 30% year-over-year and boosting its outlook for 2021 to now call for revenue growth in the high-teens to low twenties year-over-year, Williams-Sonoma boosted its quarterly dividend and its board authorized a new $1.25 billion share buyback authorization. The company began paying a quarterly dividend to shareholders in 2006, and while there were some increases to be had it wasn't until 2010 that it consistently increased its quarterly dividend. With this latest boost, its quarterly dividend stands at $0.71 per share, a significant increase compared to the $0.13 per share it paid in May 2010. Over the last decade or so, the company has correctly tapped into the aspirational living and affordable luxury space, while also embracing e-commerce. That combination has allowed it to grow its top line and bottom line over the last decade, even during the pandemic. The current consensus forecast calls for that to continue both this year and next, which should drive further cash generation and allow Williams-Sonoma to deliver yet another dividend hike in about a year's time. Adding confidence to that is the fact that if we annualize the new quarterly dividend, the corresponding payout ratio is all of ~25%. Plowing Ahead: Deere & Co. Agriculture and construction equipment company Deere & Co. is benefiting from the significant year-over-year increase in corn, wheat, and soybean prices, one of the primary drivers in farmer purchasing power. Another factor that is spurring a sizeable increase in the company's revenue this year and in the coming few is the adoption of new equipment that incorporates precision farming technology. That technology is helping farmers drive crop yields, while also realizing costs savings, which makes it a productivity upgrade compared to older equipment. Even though Deere has been paying a dividend since 1973, it hasn't been a company that ups its dividend payment annually. Rather, its increases have been more sporadic, but the latest once announced recently puts the annualized dividend payment at $4.20 per share, up from $3.60. Dividend hunters looking to partake in that dividend stream need to scoop up DE shares by Sept. 30 to receive the Nov. 8 payment. Dick's Sporting Goods: Game On Falling somewhere in between those two companies is Dick's Sporting Goods, which is benefiting from the sharp rise in the demand for sporting, camping and other outdoor activities. Similar to Williams-Sonoma, Dick's crushed July-quarter expectations, lifted its outlook for the year, boosted its quarterly dividend and shared that it now expects to repurchase a minimum of $400 million of common stock during 2021, an increase of $200 million from its prior guidance. Impressive for sure, but there was also one other item that Dick's announced that makes it a clear stand out compared to the dividend hikes announced by Williams-Sonoma and Deere. Dick's also announced a $5.50 per share special dividend that is in addition to the almost 21% increase to its regular quarterly dividend that now stands at $0.4375 per share. When we add those two together, we get a forward dividend yield of 5.4%, well ahead of the forward dividend yields of 1.5% and 1.1% to be had with WSM and DE shares, respectively. To benefit from this round of the Dividend Derby, dividend-yield seeking investors will want to be shareholder of record for DKS shares by Sept. 10.

Which of These 3 Names Will Win the 'Dividend Derby'?

Williams-Sonoma, Deere and Dick's Sporting Goods each boosted their quarterly dividend. Let's see which is the best bet.

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