Dividend Growth Investor: 15 Dividend Stocks in the News

A dividend is not set in stone. It’s determined by a company’s board of directors. And many factors go into the decision. That includes a company’s earnings, growth needs and prospects, and other potential uses for that capital.

As a result, a select number of companies have become dividend growth stocks. They have a history of raising their payouts over time. That tends to attract long-term investors. However, if the company has to reduce its dividend, the trend can reverse.

For instance, 3M (MMM) recently announced a dividend cut, by changing its dividend target to 40% of adjusted free cash flow.

In fairness, 3M recently spun off its subsidiary Solventum (SOLV). That company will pay dividends in time as well. However, the overall payout for 3M shareholders will likely be lower, making this change a stealth dividend cut.

Meanwhile, some companies prefer to reward shareholders with massive buybacks rather than dividends. Apple (AAPL) made history last week becoming the first company to announce a $100 billion buyback.

While massive, investors hoping to profit from gains as the company reduces its total shares will have to stick with a slow-growing 0.6% dividend.

Apple’s dividend growth has significantly slowed over the past few years. It still remains more tax-efficient for companies to buy back shares rather than reward their owners with cash from the business.

To see the full list of companies making dividend changes now, click here.