If you're a
dividend investor who wants to maximize the recurring income you collect from
your investments, you'll want to keep an eye on stocks that aggressively
increase their payouts. This can be a good sign that a business is not only
doing well but that returning capital to its shareholders is a priority for it.
Even though a stock's dividend yield may not be high today, through dividend
increases, you can be earning a lot more on your initial investment over time.
Credit card company Visa (NYSE:V) recently reported its latest earnings numbers and while doing so, also announced that it would be increasing its dividend by 20%. The company is coming off a strong fourth-quarter performance where its profit jumped by 16% year over year. Although inflation is threatening economies around the world and has countries worried about recessions, Visa isn't seeing a dramatic in its customers' purchasing habits as spending continues to be strong.
CEO Al Kelly said that, "As we look ahead, while some short-term uncertainty exists, we remain confident in Visa’s long-term growth trajectory across consumer payments."
The company will now be paying investors a dividend of $0.45 per share every quarter. Annually, that comes out to $1.80 per share. With its stock trading at around $210, that means it is yielding just 0.86%. It's a modest payout but it has been rising fast. Five years ago, the quarterly dividend was just $0.195, and it has increased by 131% since then.
For long-term investors, with Visa's continued growth and a rapidly increasing payout, this can make for a top stock to buy and forget about.
