8 Large Cap Dividend Stocks With Excellent Dividend Trends

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 |  Includes: AMAT, AXP, BK, MDT, PUK, TYC, USB, WFC
by: Kapitall

If you are considering stocks for their dividend income, be sure to check whether the stocks have encouraging dividend trends.

One such trend is a falling payout ratio (i.e. dividend per share/EPS) with an increasing dividend per share over the same time period. This indicates that earnings are rising, and the dividend is rising, without any compromise to dividend sustainability (a high payout ratio is harder to sustain).

We ran a screen on large cap dividend stocks for those exhibiting this trend.

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.

We also created a price-weighted index of the stocks mentioned below, and monitored the performance of the list relative to the S&P 500 index over the last month. To access a complete analysis of this list's recent performance, click here.


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Do you think these stocks pay reliable dividend yields? Use this list as a starting-off point for your own analysis.

List sorted by dividend yield.

1. Applied Materials Inc. (NASDAQ:AMAT): Provides manufacturing equipment, services, and software to the semiconductor, flat panel display, solar photovoltaic (PV), and related industries worldwide. Market cap of $14.28B. Dividend yield at 2.96%, payout ratio at 20.43%. Current year dividend per share estimate at $0.29 vs. last year dividend per share at $0.27. TTM payout ratio at 20.43% vs. 3-year average at 52.95%. Might be undervalued at current levels, with a PEG ratio at 0.77, and P/FCF ratio at 8.41. The stock has gained 1.03% over the last year.

2. Prudential plc (NYSE:PUK): Provides retail financial products and services, and asset management services to individuals and businesses in Asia, the United States, and the United Kingdom. Market cap of $24.33B. Dividend yield at 2.69%, payout ratio at 34.70%. Current year dividend per share estimate at $0.82 vs. last year dividend per share at $0.77. TTM payout ratio at 34.70% vs. 3-year average at 71.88%. Might be undervalued at current levels, with a PEG ratio at 0.9, and P/FCF ratio at 6.54. The stock has gained 8.28% over the last year.

3. The Bank of New York Mellon Corporation (NYSE:BK): Provides various products and services worldwide. Market cap of $24.59B. Dividend yield at 2.61%, payout ratio at 18.68%. Current year dividend per share estimate at $0.51 vs. last year dividend per share at $0.36. TTM payout ratio at 18.68% vs. 3-year average at 71.18%. Might be undervalued at current levels, with a PEG ratio at 0.75, and P/FCF ratio at 5.88. The stock has performed poorly over the last month, losing 15.89%.

4. Tyco International Ltd. (NYSE:TYC): Provides security products and services, fire protection and detection products and services, valves and controls, and other industrial products to customers worldwide. Market cap of $18.45B. Dividend yield at 2.52%, payout ratio at 30.50%. Current year dividend per share estimate at $0.98 vs. last year dividend per share at $0.86. TTM payout ratio at 30.50% vs. 3-year average at 249.82%. The stock has gained 4.55% over the last year.

5. U.S. Bancorp (NYSE:USB): Provides various banking and financial services in the United States. Market cap of $41.51B. Dividend yield at 2.32%, payout ratio at 16.75%. Current year dividend per share estimate at $0.48 vs. last year dividend per share at $0.20. TTM payout ratio at 16.75% vs. 3-year average at 43.96%. The stock has performed poorly over the last month, losing 10.52%.

6. Wells Fargo & Company (NYSE:WFC): Provides retail, commercial, and corporate banking services primarily in the United States. Market cap of $127.77B. Dividend yield at 1.99%, payout ratio at 7.65%. Current year dividend per share estimate at $0.49 vs. last year dividend per share at $0.20. TTM payout ratio at 7.65% vs. 3-year average at 31.05%. Might be undervalued at current levels, with a PEG ratio at 0.73, and P/FCF ratio at 4.58. The stock has lost 5.21% over the last year.

7. Covidien plc (COV): Develops, manufactures, and sells healthcare products for use in clinical and home settings in the United States and internationally. Market cap of $24.93B. Dividend yield at 1.59%, payout ratio at 21.92%. Current year dividend per share estimate at $0.78 vs. last year dividend per share at $0.74. TTM payout ratio at 21.92% vs. 3-year average at 25.24%. The stock has gained 38.48% over the last year.

8. American Express Company (NYSE:AXP): Provides charge and credit payment card products, and travel-related services worldwide. Market cap of $57.91B. Dividend yield at 1.49%, payout ratio at 18.88%. Current year dividend per share estimate at $0.73 vs. last year dividend per share at $0.72. TTM payout ratio at 18.88% vs. 3-year average at 28.90%. The stock has gained 17.97% over the last year.

*Dividend and payout data sourced from Screener.co, 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.