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Dividend investors often focus on the dividend payout ratio, which measures the size of a dividend payment to the company's net income.

The higher the dividend payout ratio, the less income is reinvested back into the company--a trend that may negatively impact future profitability.

Companies with low dividend payout ratios choose to retain most of their income, instead of paying it out as dividends. This income can then be reinvested into projects that will hopefully generate future growth, which may help the company increase future dividend payments.

For our list, we chose to only focus on companies with decreasing dividend payout ratios over the last three years that have also raised the dividend per share year-over-year. Among these stocks, we then searched for those with significant net institutional buying over the current quarter. Note: all companies listed have dividend yields above 1%.

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the top six stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.


Do you think these companies are offering attractive dividends? Use this list as a starting-off point for your own analysis.

List sorted by percentage increase in dividend per share.

1. Columbia Banking System Inc. (NASDAQ:COLB): Savings & Loans Industry. Market cap of $681.03M. Net shares purchased over the current quarter at 1.3M, which is 3.35% of the company's 38.76M share float. Dividend yield at 1.16%. Trailing twelve month payout ratio at 9.63% vs. 3-year average payout ratio at 72.97%. Current year dividend per share estimate at $0.18 vs. last year's dividend per share at $0.04 (a 350% increase). The stock is a short squeeze candidate, with a short float at 7.63% (equivalent to 16.54 days of average volume). The stock has lost 13.1% over the last year.



2. East West Bancorp, Inc. (NASDAQ:EWBC): Regional Banks Industry. Market cap of $2.77B. Net shares purchased over the current quarter at 6.0M, which is 4.18% of the company's 143.41M share float. Dividend yield at 1.07%. Trailing twelve month payout ratio at 3.77% vs. 3-year average payout ratio at 33.42%. Current year dividend per share estimate at $0.15 vs. last year's dividend per share at $0.04 (a 275% increase). It's been a rough couple of days for the stock, losing 5.48% over the last week.



3. Wells Fargo & Company (NYSE:WFC):
Money Center Banks Industry. Market cap of $142.07B. Net shares purchased over the current quarter at 249.4M, which is 5.05% of the company's 4.94B share float. Dividend yield at 1.79%. Trailing twelve month payout ratio at 11.06% vs. 3-year average payout ratio at 37.36%. Current year dividend per share estimate at $0.48 vs. last year's dividend per share at $0.20 (a 140% increase). The stock has lost 2.4% over the last year.

4. First Commonwealth Financial Corp. (NYSE:FCF): Regional Banks Industry. Market cap of $578.05M. Net shares purchased over the current quarter at 1.5M, which is 1.49% of the company's 100.83M share float. Dividend yield at 2.18%. Trailing twelve month payout ratio at 14.25% vs. 3-year average payout ratio at 174.79%. Current year dividend per share estimate at $0.12 vs. last year's dividend per share at $0.06 (a 100% increase). The stock is a short squeeze candidate, with a short float at 5.67% (equivalent to 11.56 days of average volume). The stock has performed poorly over the last month, losing 10.11%.

5. Cardinal Financial Corp. (NASDAQ:CFNL): Regional Banks Industry. Market cap of $304.34M. Net shares purchased over the current quarter at 1.4M, which is 5.05% of the company's 27.73M share float. Dividend yield at 1.14%. Trailing twelve month payout ratio at 13.03% vs. 3-year average payout ratio at 15.71%. Current year dividend per share estimate at $0.12 vs. last year's dividend per share at $0.08 (a 50% increase). The stock has gained 7.24% over the last year.

6. Fulton Financial Corp. (NASDAQ:FULT): Regional Banks Industry. Market cap of $2.11B. Net shares purchased over the current quarter at 5.6M, which is 2.86% of the company's 195.62M share float. Dividend yield at 1.51%. Trailing twelve month payout ratio at 20.96% vs. 3-year average payout ratio at 98.51%. Current year dividend per share estimate at $0.15 vs. last year's dividend per share at $0.12 (a 25% increase). The stock has gained 12.28% over the last year.

7. Polaris Industries, Inc. (NYSE:PII): Recreational Vehicles Industry. Market cap of $3.53B. Net shares purchased over the current quarter at 798.1K, which is 2.49% of the company's 31.99M share float. Dividend yield at 1.75%. Trailing twelve month payout ratio at 31.91% vs. 3-year average payout ratio at 42.33%. Current year dividend per share estimate at $1.83 vs. last year's dividend per share at $1.60 (a 14.38% increase). The stock is a short squeeze candidate, with a short float at 6.83% (equivalent to 5.02 days of average volume). The stock has gained 82.89% over the last year.

*Dividend data sourced from Screener.co, institutional data sourced from Fidelity, all other data sourced from Finviz.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: 7 Companies Raising Dividends, Being Bought Up by Institutions