We're currently in a fallow time for dividend raises, since they tend to happen during any given year's four earnings seasons. There are a great many stocks on U.S. exchanges, though, so inevitably there's a trickle of payout hikes. In fact, very recently two pillars of their respective industries declared fresh and compelling lifts to their payouts.
Luckily for income investors wanting to take advantage of such hikes, the new ones from logistics incumbent FedEx (FDX +0.65%) and veteran real estate investment trust (REIT) Realty Income (O +0.58%) have yet to kick in. Let's take a look at both.
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1. FedEx
FedEx announced its latest dividend raise toward the middle of June. It's cranking its payout $0.28 (or 5%) higher to $5.80 per share. This amount will be divided evenly among each of current fiscal 2026's four quarters, shaking out to $1.45 per share in each frame. The company didn't hesitate to mention that this is the fourth year in a row it has upped its distribution.
Could this be more a confidence-boosting measure than anything else? After all, FedEx's latest quarter raised some concerns in the market.
Said period -- the third quarter of fiscal 2025 -- saw revenue rise only marginally on a year-over-year basis (to a bit over $22 billion). The picture was brighter on the bottom line, as the logistics giant managed to improve non-GAAP (adjusted) net income by 12% year over year (to land just under $1.1 billion).
That meant mixed results, as the company beat the consensus analyst estimate for revenue, but whiffed on profitability. What really made it a quarter to forget was management's aggressive guidance reductions for the entirety of fiscal 2025. As guidance has been trimmed continually over the past few quarters, investors weren't in a very forgiving mood, and many continue to avoid the stock.
While I wouldn't count out a wily veteran operator like FedEx, I'm not crazy about the company's recent trajectory or its prospects. I can't visualize much of a surge in its business for any reason, and if anything our economy is going to weaken in the coming months, tightening the budgets of the company's ever-important corporate customers.
FedEx's upcoming dividend raise takes effect with the payout slated for July 8; investors of record as of June 23 will be eligible for this. At the current stock price, the new dividend would yield 2.6%.
NYSE: FDX
Key Data Points
2. Realty Income
Compared to FedEx's dividend lift, the latest raise from Realty Income is extremely modest -- it's a barely measurable improvement of 0.2%, resulting in an amount that remains slightly under $0.27 per share. The twist in this story is that Realty Income, which proudly tags itself as "The Monthly Dividend Company," doles out its dispensation 12 times a year instead of at the more standard quarterly rate.
Realty Income is a longstanding and prominent operator in its niche, which is the retail property market. At the core of its strategy is a concentration on leasing to businesses with relatively strong staying power, such as supermarkets and home improvement stores. A large company by REIT standards, over the past few years it's ventured into new segments (like casinos) and regions (Europe).
NYSE: O
Key Data Points
That combination of size, prominence, and expansion is keeping the growth train running. Realty Income's first-quarter results featured a nearly 10% year-over-year increase in revenue to $1.38 billion -- rather solid for a business so well established and sprawling. Adjusted funds from operations (AFFO, considered the best profitability figure for REITs) rose at a slightly higher rate a bit north of 10%.
Realty Income is something of a model and benchmark for the retail REIT segment, and results like that are the reason why. It's not only about the dividend; still, that generous monthly disbursement adds to the attractiveness of an industry star that already has much to recommend it. Owning this stock feels like money in the bank.
As for Realty Income's new dividend, it will be paid on July 15 to shareholders of record as of July 1. It yields a theoretical 5.6%.
