2025 is barely a few months outdated, however a number of corporations have already introduced sizable dividend hikes. For long-term traders and retirees, dividend progress shares could be extraordinarily interesting investments, as they reward traders for hanging on, and their payout hikes can offset the consequences of inflation.
Meta Platforms (META 1.51%), Comcast (CMCSA 1.39%), and Nexstar Media Group (NXST 4.04%) all hiked their payouts up to now month or so. Here is a better have a look at what their yields are, their prospects for extra dividend hikes, and why they seem like good shares so as to add to your portfolio at this time.
Meta Platforms
Meta Platforms solely started paying a dividend final 12 months, however it did not take lengthy for the social media big to start rising it. On Feb. 13, the corporate introduced it will be elevating its quarterly dividend by 5% to $0.525 per share. Even with the rise, it is yielding a reasonably modest 0.3%, which is nowhere close to the S&P 500 common of 1.3%.
However Meta’s financials are robust sufficient to simply assist many extra payout hikes sooner or later. In 2024, the corporate’s diluted earnings rose by a mammoth 60% to $23.86 per share — greater than 10 occasions its annualized dividend of $2.10 per share. Revenues additionally rose by 22% to $164.5 billion as advert spending on its social media platforms, together with Fb and Instagram, remained robust.
Whereas Meta has loads of capability to develop its dividend payouts, the inventory might not be an appropriate possibility for income-focused traders simply but given its gentle yield. And with the inventory not too long ago hitting all-time highs, even progress traders might wish to take into account sitting on the sidelines for now, particularly if TikTok would not find yourself getting banned within the U.S., as its continued presence available in the market may put a damper on Meta’s progress prospects.
Comcast
Telecom and media big Comcast has extra of a monitor report in the case of dividend hikes. On Jan. 30, it introduced it will be rising its dividend by 6.5%, making 2025 the seventeenth straight 12 months it has boosted its payout. The brand new annualized cost of $1.32 per share signifies that on the present share value, it yields 3.6% — a stage that revenue traders will discover extra interesting.
Comcast is not a dear inventory, both: It trades at simply 9 occasions its trailing earnings. It generated modest 1.8% income progress in 2024 with its high line climbing to $123.7 billion. It additionally carries near $100 billion in debt on its books. Traders seemingly aren’t thrilled about that burden at a time when rates of interest are nonetheless excessive.
Nonetheless, for dividend-centric traders, Comcast generally is a stable purchase proper now as its payout ratio is a modest 32% of earnings. Whereas its top-line progress price might not be all that thrilling, it is the kind of secure revenue funding you’ll be able to comfortably maintain onto for years.
Nexstar Media Group
On Jan. 29, media firm Nexstar introduced it will be rising its payout for the twelfth straight 12 months. And at 10%, it is the biggest dividend hike on this checklist. On the present share value, its new annualized dividend of $7.44 yields roughly 5%.
By way of its diversified mixture of media property, together with The CW community, Nexstar reaches 220 million individuals. Its operations have been pretty secure through the years, and whereas there hasn’t at all times been progress, the corporate has been in a position to obtain profitability. And with a modest payout ratio of round 44%, it is possible that administration will additional improve the dividend sooner or later, even when revenues do not rise. The corporate’s revenue margin is usually round 10%.
Like Comcast, Nexstar trades at a reasonably modest 9 occasions trailing earnings, which makes it a gorgeous possibility for revenue traders who’re on the lookout for a very good margin of security. Whereas conventional media might not be a sizzling place to spend money on nowadays, Nexstar inventory might be a good selection for traders trying to safe a reasonably protected, high-yielding payout.
Randi Zuckerberg, a former director of market improvement and spokeswoman for Fb and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Idiot’s board of administrators. David Jagielski has no place in any of the shares talked about. The Motley Idiot has positions in and recommends Meta Platforms. The Motley Idiot recommends Comcast. The Motley Idiot has a disclosure coverage.
