Three leading companies have announced significant increases in their dividends, all boasting double-digit percentages. Below, you’ll learn the latest payouts for shareholders and key information on their buyback plans. Additionally, I’ll update you on important proposed legislation that could impact one of these businesses.
PACCAR: A Leader in Industrial Dividends with a 4% Yield
PACCAR (NASDAQ: PCAR), a prominent manufacturer of commercial trucks, has raised its dividend by 10%. The new payout of $0.33 per share will be distributed on March 5 to shareholders recorded as of February 12. With a track record of rewarding investors, PACCAR’s average quarterly payout ratio over the last five years stands at nearly 51%. This increase gives the company an indicated dividend yield of 4.1% for 2025, assuming no changes throughout the year.
Although the periodic dividend may seem modest, PACCAR typically announces a substantial one-time extra dividend at year-end. In 2024, shareholders received an additional $3.00 per share, while in 2023, it was even larger at $3.20. Comparatively, the 4.1% yield from PACCAR significantly surpasses the 1.2% yield of the SPDR S&P 500 ETF Trust (NYSEARCA: SPY) and ranks among the top six yields for large-cap U.S. and Canadian industrial stocks.
Eli Lilly: Pharmaceutical Titan Boosts Dividend and Starts Buyback Program
Eli Lilly (NYSE: LLY), the largest pharmaceutical company by market cap, has announced a significant 15% increase in its quarterly dividend. This marks the seventh year in a row the company has raised its payout by this percentage. Shareholders on record after February 14 will receive $1.50 per share on March 10, 2025.
Alongside this announcement, Eli Lilly revealed a $15 billion share repurchase program. Given its market capitalization of $691 billion as of the close on December 20, this repurchase plan represents 2% of the company’s total value. Even though this buyback is relatively small, it is three times larger than the previous program.
Based on the closing price of just under $768 on December 20, the indicated dividend yield for Eli Lilly stands around 0.8% for 2025. While this yield is modest, it still outperforms the majority of its competitors. Of 43 large-cap pharmaceutical and biotech stocks in the U.S., Canada, and Europe, Eli Lilly boasts a higher yield than 53% of them, with 21 of those 43 stocks offering no dividends at all.
Mastercard: Positive Developments in Dividends and Regulatory Concerns
Mastercard (NYSE: MA) has raised its quarterly dividend by 15%. Shareholders on record as of January 9 will receive a new payment of $0.76 per share on February 7. This change brings the indicated dividend yield to just under 0.6% for 2025.
Similar to Eli Lilly, Mastercard has also initiated a substantial share buyback plan, totaling $15.9 billion. This combines the new authorization of $12 billion with the $3.9 billion remaining from an older program, which equates to over 3% of Mastercard’s market cap of $485 billion as of December 20.
In addition to these positive financial announcements, recent concerns about regulation have eased for Mastercard. In November, executives attended a Senate Judiciary Committee hearing to address issues surrounding the Credit Card Competition Act (CCCA). This proposed legislation aims to challenge the perceived duopoly of Visa and Mastercard in the credit card market, which some argue causes higher swipe fees for merchants.
The CCCA would require banks to offer options for payment networks beyond Visa and Mastercard, potentially decreasing their transaction volumes and affecting revenue. However, as the bill has yet to advance to a votable stage, and given the pressing concerns facing Congress, the likelihood of its immediate passage seems low. Nevertheless, the CCCA has garnered bipartisan support, indicating that it may be reintroduced in the next legislative session.
The views and opinions expressed herein are those of the author and do not necessarily reflect Nasdaq, Inc.
