Two companies about to raise their dividends
As today’s widely predicted dividend cut by Alcoa [[AA]] shows, it’s not especially difficult these days to identify companies who are about to slash their dividends. But what about predicting the companies who are about to raise their dividends?
David Peltier, manager of the Dividend Stock Advisor, does just that in the following short video (0:54):
In the video, Peltier names two companies – Chevron and Northrop Grumman – that he believes are going to raise their dividends sometime in April. He also warns of one company – DuPont [[DD]] – that’s likely to cut its dividend.
Here’s my current quick take on the two dividend stocks likely to see dividend increases next month (the stars represent Dividendinvestor.com’s star ranking system – three stars are five years of consecutive dividend increases, four stars are ten, and five stars are 20):
Chevron [[CVX]] (***) – Trading at about $63 and yielding 4%, the stock of this integrated energy company appears either about fairly valued or – based on more conservative earnings estimates – overvalued here. The technical picture supports the latter, as CVX is still trading well above its long-term linear regression trendline (currently located at about the $43 level), suggesting – but not necessarily predicting – that it has plenty of room to correct on the downside. I wouldn’t mind owning CVX at lower prices, but I’m staying away for now.
Northrop Grumman [[NOC]] (0 stars) – By most valuation measures the shares of this aerospace/defense contractor appear undervalued here at about $38 and with a dividend yield of 4.2%. (The company did post a loss for last year, but that was due to one-time writedowns.) The stock is currently trading well below its very long-term linear regression uptrend line (currently located at about the $50 level) and is both oversold and exhibiting intermediate-term positive divergences on various price oscillators, suggesting possible bottoming action of some sort. Near-term downside support is at about the $35, $32 and $30 levels. The company doesn’t have a long history of raising its dividend consistently – although it appears to have done so for the past few years. I currently have a short put position in General Dynamics [[GD]], but would consider adding some NOC at lower prices.
Related posts:
Eight companies that just raised their dividends
Eight more companies that just raised their dividends
General Dynamics: A defensive dividend play
