When firms increase their dividends, it is typically a positive sign that they are generating excess cash flows that can be distributed to shareholders.
Additionally, investing in a firm with consecutive dividend hikes, is a sign that the company has strong fundamentals.
Since valuations continue to decline, investors may want to seek stocks that can support dividend hikes during the tough macroeconomic environment. As the recent consumer price index and producer price index did not show sufficient signs of inflation cooling, investors should be wary of further headwinds.
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Here's a look at Tanger Factory Outlet Centers Inc. (NYSE: SKT), McDonald’s Corporation (NYSE: MCD) and Commercial Metals Company (NYSE: CMC).
- Tanger Factory Outlet Centers is offering a dividend yield of 5.46% or 88 cents per share annually, making quarterly payments, with a consistent track record of increasing its dividends once in the past year. Tanger Factory Outlets manages a portfolio of 37 centers with an additional center currently under development. Tanger operates properties located in 20 states and in Canada, totaling about 14 million square feet, leased to over 2,700 stores operated by more than 600 different brand name companies. On Oct. 11, Tanger announced a 10% increase in its annual dividend on its common shares from 80 cents per share to 88 cents per share, making the quarterly cash dividend increase to 22 cents per share.
- McDonald’s is offering a dividend yield of 2.50% or $6.08 per share annually, through quarterly payments, with an aristocratic track record of increasing its dividends for 46 consecutive years. The fast-food giant has 2021 system sales of $112 billion across more than 40,000 stores and 119 countries. McDonald’s increased its quarterly cash dividend to $1.52 per share on Oct. 13, equivalent to $6.08 annually, which will be payable on Dec. 15 to shareholders of record at the close of business on Dec. 1.
- Commercial Metals is offering a dividend yield of 1.54% or 64 cents per share annually, utilizing quarterly payments, with a track record of increasing its dividends once in the past year. Commercial Metals primarily manufactures rebar and structural steel and operates steel mills, steel fabrication plants, and metal recycling facilities in the United States and Poland. On Oct. 11, Commercial Metals increased its quarterly cash dividend to 16 cents per share of its common stock, an increase of $0.02, or 14%, from the dividend paid in July 2022.
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