Are you missing out on these 2 dividend hikes from top companies?

We’re off the penultimate earnings season this year, which means the usual seasonal stream of dividend declarations is over. After all, most publicly traded companies tend to announce their latest shareholder payouts either with quarterly results or shortly before. This is when we receive most of the dividend increase announcements.

Still, there are always outliers, and in mid-September, two high-profile companies in their respective industries raised their payouts — the tech titan Microsoft (MSFT -0.78%) and beverage conglomerate Keurig Dr Pepper (KDP -0.11%). In both cases, the dividend increases were relatively generous and — the best part for income investors — they were declared with enough time for opportunistic investors to qualify for the higher amounts.

1. Microsoft

People of a certain age like it, well, I myself remember when Microsoft resolutely stuck to a strategy of “plow the profits back into the business”. That all changed in 2003, when the hugely profitable software giant announced its first dividend in a big, easy-to-understand flash. For two years, this payment was distributed annually. The company then switched to a quarterly distribution and has followed this policy ever since.

It has also been a regular winner, reliably declaring dividend increases once a year. In mid-September, Microsoft kept that tradition alive by declaring that its next quarterly distribution would be $0.83 per share. It is almost 11% higher than the previous dividend, in line with the increases that management has adopted since 2019.

Microsoft is also opening its coffers for more share buybacks. The company’s board has authorized a new share buyback program of up to $60 billion in its stock. The initiative has no expiration date, but may be terminated at any time at the company’s discretion.

Both moves come weeks after Microsoft closed its door on fiscal 2024. As it usually does, the company managed to post encouraging growth numbers that beat analysts’ estimates (albeit only slightly).

Fourth-quarter revenue rose 15% to nearly $65 billion, while total net income improved nearly 10% to $22 billion. Not for the first time, its Microsoft Cloud offerings were a real growth engine, growing them by 21% to just under $37 billion. The company is also enhancing its product line with artificial intelligence (AI) capabilities — it is a leading investor in well-known ChatGPT developer OpenAI — which positions it well to take advantage of this hot, on-demand technology.

Microsoft’s newly raised dividend will be paid on December 12th to investors of record since November 21st. Despite the double-digit increase, it’s not exactly a high-yielding dividend — at the stock’s most recent closing price, the new amount would yield 0.8%.

2. Keurig Dr Pepper

Like Microsoft, Keurig Dr Pepper didn’t rush to declare its latest dividend increase. More than a month after disclosing its second-quarter fundamentals, the company said its next quarterly payout will be $0.23 per share, an amount 7% higher than its last distribution.

Keurig Dr Pepper began life in its current form with a special dividend of $103.75 per share in 2018. Since that attention-grabbing move, the company has consistently paid a dividend every quarter, and since 2021, at the age of majority every year.

This latest excursion feels fitting. It comes just a few months after The Wall Street Journal published an article stating that Dr. Pepper’s sales volumes had fallen PepsiCoPepsi is considered the 2nd largest soda in the US (behind, of course, Coca colaproduced his signature). That’s quite a feat, as Pepsi has been in second place for most of the last 40 years.

So it was no surprise that in the company’s most recently reported quarter, “soft drinks” — that is, soft drinks including Dr Pepper and Snapple — saw a rise in U.S. net sales, and much of the 3, 3% from last year. – the year’s increase was due to the increase in prices. Coffee, meanwhile, fell 2.1%. Fortunately, soft drinks are the larger of the two businesses.

The company saw encouraging growth in international sales, which rose nearly 16 percent to about $600 million in total. That’s not huge when compared to total net sales of more than $3.9 billion, but it points to a promising opportunity for the future.

Keurig Dr Pepper anticipates a good 2024 at the end of the day. The company recently guided for year-over-year improvement in overall net sales in the single-digit percentages and in the high-single-digit percentages for non-GAAP (adjusted) earnings per share. Consensus analyst estimates are based on these projections.

Keurig Dr Pepper will pay its new dividend on October 11th to shareholders of record as of September 27th. At the current share price, the amount raised would have a return of approximately 2.5%.