Wolfe Research found that some big names have already started paying dividends this year, while a handful of stocks may have what it takes to start splitting income to investors. This year alone, big names like Salesforce and Meta Platforms have announced their first dividend payments. Alphabet joined the ranks of dividend payers in April, authorizing an initial dividend of 20 cents per share and repurchasing $70 billion in stock. Charlie Gaffney, a managing director at Morgan Stanley Investment Management, told CNBC in April that Alphabet’s move to start paying a dividend is cause for celebration, but what’s really exciting is the increase in dividends. Investors’ prospects for paying dividends. He also manages the Eaton Vance Enhanced Equity Income Fund, which holds shares in Google’s parent company. “We’re pleased that they initiated this initiative, but we’re also excited about the opportunity to grow the dividend over time,” he said. Still, there are a few companies that may be preparing to do so, according to Wolf’s May 20 report Start paying the first dividend. “After being at the bare minimum for about 10 years (in growth-focused markets, COVID-19), dividends announced in the past six to 12 months have increased,” said Chris Senyek, chief investment strategist at Wolfe. The company screens potential dividend sponsors, looking for companies with strong free cash flow yields, currently returning capital to investors through share buybacks, and not being highly leveraged. Some of these names are listed below. Footwear manufacturer Skechers made Wolfe’s list. Wolfe’s analysis shows that the company’s stock price will rise 13% by 2025, and the company’s free cash flow is expected to yield 3% in 2024. Analysts are also generally bullish on the stock, with 11 of 14 analysts giving it a “buy” or “strong buy” rating, London Stock Exchange Group (LSEG) said. On April 15, UBS said when talking about Skechers with a buy rating: “We believe strong pricing, improving sales mix and fixed cost leverage will be margin drivers. We expect SKX’s sales, ( EBIT margins and earnings will grow much faster than the market expects. Wolf also called O’Reilly Automotive a potential dividend sponsor and highlighted that the company expects corporate free cash flow of $3 in 2024. %., with a rating of Buy or Strong Buy by 64% of analysts, according to LSEG. O’Reilly was rated top pick by TD Cowen last month, noted analyst Max Rakhlenko, who said, “The stock appears to be priced perfectly. , but fundamentals and execution remain strong, and we would use a potential pullback as an opportunity to add to our holdings. PayPal has also joined Wolfe’s list of contenders that may be preparing to start paying a dividend. Free cash flow to company yield ratio is expected to be 7% in 2024, according to Wolfe’s analysis. The stock is up slightly 1% year to date, according to Wolfe’s analysis According to data from the London Stock Exchange (LSEG), 20 of the 47 analysts covering the stock rated the stock as a “buy” or “strong buy.” However, the consensus price target implies 22% upside from current levels. Wolff isn’t the only Wall Street firm to highlight PayPal as a possible dividend sponsor. Morgan Stanley called the stock a potential dividend payer earlier this month, adding it to its list of ideas with “a net cash position and sufficient free cash flow to sustain and self-fund (dividends).” ” Other companies on the list include Mattel, Fiserv and Centene.
