Are Dividends on the Way Back?

There may be signs of life with increases in dividends from certain stocks.

person giving money wrapped in red bow
(Image credit: Getty Images)

Savers and investors have few causes for complaint. But one frustration is the sluggish pace and shrunken heft of dividend increases. Although U.S. companies have more than $2 trillion in cash, scads of firms that not long ago raised dividends by 10% a year have morphed into relative misers: The median annualized increase within the S&P 500 dwindled to 6% in the fourth quarter of 2023. 

Look at ProShares S&P 500 Dividend Aristocrats (NOBL), an equal-weighted exchange-traded fund of 68 stocks with 25 consecutive years or more of raises. From 2015 to 2020, the fund hiked its payout by 11.5% a year. Since the start of 2021, that fell to 5.4%, limited by near-freezes from one-time cash spigots like Kimberly-Clark. 

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Jeffrey R. Kosnett
Senior Editor, Kiplinger's Personal Finance
Kosnett is the editor of Kiplinger's Investing for Income and writes the "Cash in Hand" column for Kiplinger's Personal Finance. He is an income-investing expert who covers bonds, real estate investment trusts, oil and gas income deals, dividend stocks and anything else that pays interest and dividends. He joined Kiplinger in 1981 after six years in newspapers, including the Baltimore Sun. He is a 1976 journalism graduate from the Medill School at Northwestern University and completed an executive program at the Carnegie-Mellon University business school in 1978.