Discover the benefits of stock dividend increases as indicators of investor returns and company value.
Dividends
February 7, 2025
A dividend increase occurs when a company raises the amount of money it pays to shareholders per share of stock. Dividends are a portion of a company’s earnings distributed to shareholders as a reward for their investment. Companies typically issue dividends on a regular basis—quarterly, semi-annually, or annually—and occasionally they decide to increase the payout. Dividend increases are typically, but not always, announced during earnings reports or within a company’s 10Q filing.
Companies usually raise dividends to signal financial strength, consistent profitability, and confidence in future earnings. This often reflects a stable or growing cash flow, allowing them to reward shareholders with a higher yield on their investment. Dividend increases can also attract new investors, as rising dividends may indicate a well-managed company with a solid business model.
The dividend growth rate (DGR) is the percentage growth rate of a company's dividend achieved during a certain period of time. Frequently, the DGR is calculated on an annual basis. However, if necessary, it can also be calculated on a quarterly or monthly basis.
Dividends increase value by providing shareholders with regular income on their investment, which can be reinvested to purchase more shares. The declaration of a dividend naturally encourages investors to purchase stock. Investors know that they'll receive a dividend if they purchase the stock before the ex-dividend date so they're willing to pay a premium. This causes the price of a stock to increase in the days leading up to the ex-dividend date.
A high dividend means a company pays a significant dividend yield relative to its stock price. High dividends are typically attractive to income-focused investors looking for steady payouts. In some cases, a high dividend may mean the company is in distress and is trying to attract investors. However, not every public company pays dividends; in fact, most don't.
In accounting terms, an increase in dividends is recorded as a debit to retained earnings, reflecting the reduction in the company's retained profits allocated to shareholders. In short, increases in dividends accounts are debits; decreases are credits.
News outlets like CNBC or MarketWatch will make note of the dividend increases for large companies during earnings announcements, but dividend increases by midcap stocks and smallcap stocks are largely underreported. That’s why tools like LevelFields AI can be extremely helpful for locating dividend increases, such as those reported by LevelFields below.
Balchem Corporation a global manufacturer and distributor of specialty chemicals and ingredients for the nutrition, pharmaceutical, and agricultural industries. They have declared a 10.1% stock dividend increase to $0.87 per share.
Dividend Yield: 0.54%
ServisFirst Bancshares is a bank holding company based in Birmingham, Alabama, offering commercial banking products focused on the needs of professionals, particularly medical, accounting, engineering, and legal professions. They've increased their quarterly cash stock dividend by 12%.
Dividend Yield: 1.49%
First Farmers and Merchants Corporation a regional bank providing banking and financial services such as loans, deposits, and investment products. They have raised their stock dividend by 12.5% to $0.27 per share.
Dividend Yield: 3.09%
Accenture plc is a global professional services company providing a range of services and solutions in strategy, consulting, digital, technology, and operations. They've increased their quarterly cash stock dividend by 15% to $1.48 per share.
Dividend Yield: 1.66%
Mastercard Incorporated is a multinational financial services corporation primarily known for processing payments between banks of merchants and the card-issuing banks or credit unions of the purchasers. They've declared a 15% increase in their quarterly cash stock dividend to 76 cents per share.
Dividend Yield: 0.58%
Zoetis is a global animal health company that develops, manufactures, and commercializes medicines, vaccines, and diagnostic products for pets and livestock. They have declared a stock dividend increase of 16% to $0.50 per share.
Dividend Yield: 1.20%
Aflac Incorporated a leading provider and underwriter of supplemental health and life insurance products in Japan and the U.S. Aflac has announced a 16.0% increase in their quarterly stock dividend.
Dividend Yield: 2.18%
Ameris Bancorp is a regional bank holding company headquartered in Atlanta, providing a range of banking services to its retail and commercial customers. Ameris Bancorp has increased its stock dividend by 33.3% to $0.20 per share.
Dividend Yield: 1.21%
Sign up for LevelFields for the remaining companies with the largest dividend increases and get alerts every time a company does a massive dividend increase.
For investors, a dividend increase often suggests that the company is financially sound and committed to returning value to its shareholders. It can also enhance the total return on investment, providing both capital appreciation (if the stock price rises) and growing income over time. Dividend growth investors, in particular, seek out companies that regularly increase their dividends as a sign of long-term stability and growth potential.
While not guaranteed, a dividend increase can lead to positive market sentiment. Investors may view the increase as a sign of company strength, driving demand for the stock and potentially boosting its price. Over the long term, consistently rising dividends can contribute to higher overall returns and attract income-focused investors.
When it comes to finding companies that consistently raise their dividends, traditional research methods can be time-consuming and frustrating. That’s where LevelFields shines. With our powerful event-driven intelligence platform, you can instantly see which companies are increasing their payouts—no more endless scanning of financial news or piecing together scattered data.
Why LevelFields Stands Out for Dividend Tracking
If you’re serious about building a portfolio that capitalizes on dependable, growing income streams, LevelFields is the tool you’ve been waiting for. Start using it today to take the guesswork out of dividend investing and focus on what really matters: making informed decisions and growing your returns.
When a company increases dividends, it’s raising the amount of money it pays out to shareholders per share. This can happen when the company’s profits and cash flow are strong, enabling it to reward investors with a larger payout. Dividend increases are often seen as a sign of a company’s financial health and long-term stability.
To generate $1,000 a month (or $12,000 annually) in dividends, you’ll need to consider the dividend yield of your portfolio. For example, if your portfolio’s average yield is 4%, you would need to invest $300,000. At a 5% yield, you’d need $240,000. The higher the yield, the less capital required, but higher yields often come with more risk.
A rising dividend yield can be positive, as it shows leadership is so optimistic about cash flows they can literally give away money. However, a yield increase due to a falling stock price can be a bad sign. Looking at the reason behind the higher yield is critical as a yield increase due to financial distress is not.
You buy a stock for $100/share. That company pays you a dividend yield of 5%. This means every year the company will pay you $5 just to own the stock, in 4 quarterly payments. If you bought 1,000 shares for $100,000, you’d be earnings $5,000 per year in passive income.
Earning $5,000 a month in dividends (or $60,000 annually) depends on your portfolio’s dividend yield. At a 4% yield, you’d need $1.5 million invested. At a 5% yield, you’d need $1.2 million. As with any income strategy, diversification and stability of the underlying companies are key.
Dividends aren’t exactly “free money.” They represent the return on your investment in the company based on your ownership of that company’s profits.
High-yielding stocks can be found in industries like real estate investment trusts (REITs), utilities, and energy. However, the highest-yielding stocks are not always the best choice as abnormally high yields may signal underlying issues that have caused the share price to drop substantially. In these cases, the company is likely to cut the dividend yield to save money.
In many countries, dividends are considered taxable income. The tax rate depends on factors such as the dividend type (qualified or ordinary) and your tax bracket. In some cases, tax-advantaged accounts like IRAs or 401(k)s can help defer or eliminate dividend taxes.What Is the Downside to Dividend Stocks?Dividend-paying stocks may offer steady income, but they aren’t risk-free. Companies can reduce or eliminate dividends during tough economic times, causing stock prices to fall. Additionally, focusing only on dividends may limit exposure to high-growth companies that reinvest earnings rather than paying them out.
The amount of tax-free dividend income depends on local tax laws. In some jurisdictions, qualified dividends or dividends held within tax-advantaged accounts may not be taxed at all. In other cases, dividends up to a certain threshold are taxed at a reduced rate or not taxed.Are Dividends Paid Out Monthly?While many companies pay dividends quarterly, some pay monthly. Monthly dividend stocks can be attractive for investors seeking consistent cash flow, but the frequency of payment doesn’t necessarily indicate the quality of the dividend. Some ETFs, like BITO, pay a monthly dividend.
To minimize or avoid taxes on dividends, you might consider holding dividend-paying stocks in tax-advantaged accounts (like IRAs in the U.S.), investing in tax-free municipal bond funds, or focusing on qualified dividends, which often have lower tax rates than ordinary income.
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