It's the start of a new year and for many dividend-growth stocks, it's also time to raise dividend payments. As long as their performances are strong and their outlooks remain good, companies that have increased their payouts over the years will likely continue to do so. That's what these three stocks did in February. Plus, all three of these stocks currently pay dividends that are much higher than the average S&P 500 yield of 2% per year.
Gilead Sciences (NASDAQ: GILD) released its fourth-quarter and year-end results on Feb. 4. The healthcare stock reported a solid $5.4 billion in net income on revenue of $22.4 billion. The biotech company develops a variety of drugs for serious diseases, including hepatitis B and hepatitis C, as well as HIV, which is where the company sees a lot of its growth. However, both revenue and net income showed little increase from the prior year. But 2019 was still a strong year, and it was good enough for the company to announce on the same day that it would grow its dividend payments by 8%.
The company will now pay shareholders $0.68 every quarter, up from the previous payment of $0.63. Gilead has only paid dividends since 2015, but it has been increasing them annually. Initially paying $0.43 every quarter, its payouts have risen by 58% in less than five years, averaging a compounded annual growth rate (CAGR) of about 9.6%. With the current rate increase, investors who buy shares of Gilead today will earn 4% in dividends per year.