The stock market continues to be a volatile place.
After a red-hot 2021, the S&P 500 is already down more than 5% to start the new year.
It might be tempting to jump out of stocks completely, but here’s the reality: No one knows for sure what the market will do next.
The good news? You don’t have to time the market to make money in stocks. There are companies that provide cash returns to investors through reliable dividends.
Some of them even have the ability to consistently increase their payout year in and year out. For dividend investors, it’s like getting a pay raise — something that’s much-needed with inflation at 40-year highs.
So here’s a look at three companies that have the potential to hike their dividends next month.
Walmart (WMT)
Known for its “Everyday Low Prices,” Walmart is now the largest retailer in the world by revenue. The company has approximately 10,500 stores under 48 banners in 24 countries around the world.
Every week, approximately 220 million customers visit Walmart’s stores and websites.
And because of its massive economies of scale, the business has remained resilient throughout several economic cycles.
That stability is also reflected in the amount of cash Walmart returns to shareholders.
Consider this: Walmart paid its first-ever dividend in 1974. Since then, it has increased its payout every single year.
While the booming e-commerce industry is often considered a threat to brick-and-mortar retailers, Walmart has turned it into a catalyst.
In the most recent fiscal quarter, e-commerce sales at Walmart U.S. were 87% higher compared to two years ago.
Walmart shares have been trading mostly sideways for the past year and currently offer an annual dividend yield of 1.7%.
The company usually makes dividend announcements for the year in February. Given how well its business has been doing, shareholders can look forward to another dividend increase from the retail giant next month.
Coca-Cola (KO)
You don’t need to be an investment expert to know why Coca-Cola can be a great pick for dividend investors.
The behemoth is deeply entrenched in the global beverage industry. It has many iconic brands, with products being sold in more than 200 countries and territories. And even in a recession, a simple can of Coke is still affordable to most people.
As a century-old company, Coca-Cola has delivered enormous returns to long-term investors. A big reason for that is the company’s impressive track record of dividend growth.
Early last year, Coca-Cola’s board of directors approved a 2.4% dividend hike, raising the quarterly payout from 41 cents to 42 cents per common share. That was the company’s 59th consecutive annual dividend increase.
If history is any guide, investors can expect Coca-Cola to announce its 60th straight annual payout increase next month.
The shares have climbed roughly 30% over the past year and now offer an annual dividend yield of 2.8%.
While Coca-Cola has already built an established market position, its business is still growing. In Q3 of 2021, the company’s revenue grew 16% year over year to $10 billion. Adjusted earnings per share rose 18% from a year ago.
Genuine Parts Company (GPC)
As impressive as Coca-Cola’s track record is, there are companies that have delivered dividend growth longer than the beverage giant.
Genuine Parts Company is one of them. 2021 marked the 65th consecutive year of increased dividends paid to GPC shareholders.
GPC is an automotive and industrial replacement parts distributor. It has a global network of more than 10,000 locations in 14 countries.
The stock currently yields 2.4%.
The automotive industry is known to be a cyclical one. But as a replacement parts distributor, CPC’s business has thrived throughout different economic cycles.
In fact, since GPC’s founding in 1928, its sales have increased in 87 years of its 93-year history.
From 2010 to 2020, the company’s revenue increased at a compound annual growth rate of 6%.
A consistently growing business allows the company to deliver an increasing stream of cash returns through thick and thin.
Considering that GPC’s last dividend hike was announced in February 2021, the next one is likely to come within the coming weeks.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
