Generous Dividend Increases Make Quest Diagnostics and American Lucrative Long-Term Investment Opportunities

Investing in dividend-paying stocks can be a smart strategy for building long-term wealth. By holding shares in companies that offer regular dividend payments, investors can earn a reliable source of income and benefit from any increases in those payments over time.

Recently, two companies that have caught the attention of investors with their generous dividend increases are Quest Diagnostics and American Express. Both companies have announced increases of 7%, which is well above the current average for S&P 500 companies.

Additionally, Quest Diagnostics has seen a slight increase of 0.53% in the last week, while American Express has remained relatively stable. These factors make both companies worth considering for investors looking for reliable dividend-paying stocks to add to their portfolios.

Quest Diagnostics

Quest Diagnostics, a leading provider of diagnostic information services, recently announced that it would raise its quarterly dividend by 7.5% to $0.71 per share, up from $0.66. This raise translates to an annual rate of $2.84, yielding 2%, higher than the S&P 500 average of 1.6%.

The company has been steadily increasing its dividend payments for the last 11 years, which has made it an attractive option for income-seeking investors. Despite disappointing revenue of $9.9 billion, which was 8.4% less than the previous year, Quest’s diluted earnings of $7.97 were higher than its dividend, resulting in a payout ratio of 36%.

These numbers demonstrate the company’s strong financial position and ability to continue increasing its dividend payments in the future. In addition, quest Diagnostics stock is currently trading at a relatively cheap valuation, which makes it an attractive long-term investment.

In addition, the company’s strong brand recognition and extensive network of diagnostic testing facilities provide a wide moat against potential competitors. In contrast, the growing demand for medical diagnostics services in an aging population makes Quest a compelling growth opportunity.

American Express

American Express recently announced a dividend increase of 15%, which translates to around $0.60 per share, or $22.4 per year, yielding 1.3%. While this may be lower than Mastercard and Visa’s dividend yields, it is still considered a good investment.

Furthermore, this announcement comes on the back of favorable Q4 2022 results, with the company earning over $14 billion, a 17% YoY increase. Despite the economic downturn, the company’s total revenue for the year was $52.9 billion, a 25% increase from the previous year.

The diluted EPS only dipped by 2%, which is a good sign. In addition, the company had a payout ratio of 24%, which includes the recent dividend increase. American Express is looking to build momentum this year and expects a 15% revenue growth.

The company’s strong financial performance, combined with its recent dividend increase, makes it an attractive long-term investment option.

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