Growing numbers of companies have made initial declarations this year — including Meta Platforms and Google-parent Alphabet — and Wolfe Research is highlighting a long list of companies that could be next to reward shareholders. The most likely candidates to initiate a dividend are those that are already returning capital to shareholders through buybacks and that are not heavily indebted, in Wolfe's view. A company's high free cash flow yield is an additional trait, Wolfe noted.
For example, of the companies whose boards of directors have announced first-time dividend programs over the past three years, the majority have underperformed the market in the subsequent three-, six-and 12 months, Senyek added. Whatever the outcomes, here's a look at some of the stocks Wolfe Research thinks could be the next to make quarterly dividend payments to shareholders. One candidate, clothing chain Abercrombie & Fitch , has already soared more than 78% in 2024.