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. Dividend announcements have steadily increased this year, already matching the total in all of 2023, Wolfe said Monday. Mixed reception Wolfe chief investment strategist Chris Senyek warned that Wall Street sometimes takes a dim view of companies in the months after they start paying a dividend, at least as reflected in stock price performance in succeeding months. 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. New Albany, Ohio-based Abercombie has climbed in recent days thanks to a higher-than-expected full-year sales growth forecast, after earlier striking a more cautious tone around the holiday shopping season. The stock is 20% higher in just the past month. ANF YTD mountain Abercrombie & Fitch stock. Mattel was another contender, according to Wolfe’s screen. Stock in the Barbie maker is virtually unchanged in 2024, despite the El Segundo, Calif-based company boasting one of the highest free cash flow yields found by Wolfe, at 7%. MAT YTD mountain Mattel stock. Other names that turned up on Wolfe’s list were Match Group and Airbnb .
