These three stocks received dividend increases.

Dividend increases are generally a welcome event for investors for several reasons. The most obvious one is that the stock pays them more money, which they can then invest or reinvest in the stock. The second reason is that it is often a sign that a company is performing well because it usually means that revenue is growing and cash flow is higher.

But that isn’t always the case. That’s because sometimes companies increase their dividends to appease investors when they actually don’t have excess cash flow. That’s not the case with these three stocks. All have raised their dividends and appear to be solid buys for income investors.

JP Morgan Chase

JP Morgan Chase (NYSE:JPM) is one of the largest and best-run banks in the United States. The company has consistently outperformed its competitors over the years and is built on a so-called fortress balance sheet, a term CEO Jamie Dimon uses to describe the company’s focus on liquidity and financial stability.

The result of this strategy is a consistent dividend that has raised the dividend for 13 consecutive years since 2011. On March 19, JPMorgan Chase announced it was increasing its quarterly dividend to $1.15 per share, up from $1.05 the previous quarter. Or $4.60 per share per year. The dividend increase comes at a 2.36% yield, which is higher than the average yield for the S&P 500, and the payout ratio (the amount of earnings paid out in dividends) is just 25%, meaning JPMorgan Chase can easily afford it. impression.

JPMorgan Chase’s stock is up 13% year to date and is reasonably valued with a forward price-to-earnings (P/E) ratio of 12. With a strong balance sheet, it should continue to perform well and deliver dividends.

Dick’s Sporting Goods

Dick’s Sporting Goods (NYSE:DKS) had a strong quarter, reporting $3.9 billion in revenue, up 8% year-over-year. The stock rose more than $224 per share in March, hitting an all-time high, and the stock is up about 52% YTD. The strong quarter capped off a great fiscal year in which the sporting goods company was able to reduce debt and increase operating cash flow from $1.3 billion, or 10% of revenue, the previous year to $1.5 billion, or 12% of sales.

Thanks to our capital strength and strong performance, we were able to increase our quarterly dividend to $1.10 per share, payable on April 12th. This is a 10% increase from the previous quarter. This marks the 10th straight year that the retailer has increased its dividend. Dick’s will receive an annual salary of $4.40 per share, with a yield of approximately 2.00%. It also has a very manageable payout ratio of 31%, which it should be able to maintain given its history, capital strength, and prospects for sales and earnings growth in 2024.

Dick’s appears to be a solid buy due to its dividend, reasonable valuation, and growth potential.

Colgate-Palm Olive

Colgate-Palm Olive (NYSE:CL) has long established itself as a manufacturer of consumer staples such as soap, toothpaste, and other household and health care products. And it has paid quarterly dividends consistently since 1895. What’s even more impressive is that they’ve increased their annual dividends for the past 61 consecutive years, making them Dividend Kings, an elite group of stocks that have increased their dividends for at least 50 years. Only six U.S. stocks have raised their annual dividends longer than Colgate-Palmolive.

On March 14, the company increased its quarterly dividend to 50 cents per share from 48 cents per share the previous quarter. The new dividend will be paid to investors on May 15 with a yield of approximately 2.26%. The payout ratio is a bit high at 59%, which is usually a bit of a red flag for investors. But that doesn’t seem to be a big concern for Colgate-Palmolive for a few reasons. First, the ratio is unusual because it has consistently remained in the 50% range for the past few years.

Additionally, the company continues to see earnings growth and expects margin expansion and double-digit earnings per share growth in 2024, which is expected to lower its dividend payout ratio. We also improved our balance sheet by increasing our operating cash flow by 48% to $3.7 billion, and increased our free cash flow before dividends to $3 billion from $1.86 billion a year earlier.

Colgate-Palmolive, like the other two stocks, should have no problem extending its impressive streak of dividend increases. The stock is up 10% YTD and its forward P/E of 25 is very reasonable. The steady returns this stock generates make it worth considering for income investors.