These companies may be primed to start offering a dividend, Wolfe says

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These companies may be primed to start offering a dividend, Wolfe says

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parent. “We are excited that they initiated, but we’re also excited about the opportunity to grow the dividend over time,” he said. That said, a few more names might be poised to kick off their first dividend payments, according to a May 20 report from Wolfe. “After a ******* of minimal dividend initiations over the prior ~10 years (growth focused market, COVID), there’s been an increase in announcements over the last 6-12 months,” said Chris Senyek chief investment strategist at Wolfe. The firm screened for potential dividend initiators, looking for names that have strong free cash flow yields, that are currently returning capital to investors through share buybacks and that aren’t highly levered. A few of the names are listed below. Footwear manufacturer Skechers made Wolfe’s list. Shares are up 13% in 2025, and the company has an estimated 2024 free cash flow to firm yield of 3%, according to Wolfe’s analysis. Analysts also generally like the stock, with 11 out of the 14 analysts covering the name rating it a buy or strong buy, according to LSEG. “We see strong pricing, an improving sales mix, and fixed cost leverage as margin tailwinds,” UBS said of buy-rated Skechers on April 15. “We expect SKX’s sales, [earnings before interest and taxes] margin, and earnings to grow much faster than the market expects.” Wolfe also called out O’Reilly Automotive as a potential dividend initiator, highlighting the company’s estimated free cash flow to firm of 3% in 2024. Shares are up a mere 1.5% in 2024, but the name ******** liked by the Street, rated a buy or strong buy by 64% of the analysts covering it, per LSEG. O’Reilly was named a top pick at TD Cowen last month. Analyst Max Rakhlenko noted that “the stock appears priced for perfection, but fundamentals and ********** ******** strong, and we’d use a potential pull back as an opportunity to add.”

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also joined Wolfe’s list of contenders that may be poised to kick off a dividend. Estimated free cash flow to firm yield comes in at 7% for 2024, per Wolfe’s analysis. The stock has a modest 1% gain year to date, and 20 of the 47 analysts covering the name rate it a buy or strong buy, per LSEG. However, consensus price targets imply 22% upside from current levels. Wolfe isn’t the only Wall Street shop highlighting

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as a possible dividend initiator. Morgan Stanley earlier this month called out the stock as a company that could potentially issue a dividend, adding it to a list of ideas that have a “net cash position and sufficient free cash flow to sustain and self-finance initiating [a dividend].” Other names on the list include Mattel , Fiserv and Centene .

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Dividends,Skechers USA Inc,OREILLY AUT DRN,

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Holdings Inc,Mattel Inc,Fiserv Inc,Centene Corp,business news
#companies #primed #start #offering #dividend #Wolfe

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