Eyeing Dividend Growers with Unusual Earnings Dates

Takeaways

  • The third-quarter earnings season is off and running as stocks hold near highs

  • Shareholder returns via dividends and buybacks are in focus

  • We highlight three upcoming reporters with unusual earnings dates compared to historical trends

The bar is raised for Q3. With a handful of earnings reports delivered from major banks, companies from other sectors begin now to report results to the street. This quarter, though, the S&P 500®’s EPS growth rate is not all that impressive, at under 5%.1 We discussed it last week in our Q4 2024 Investor Conference & Events Highlights missive, but there are new developments.

The US Dollar Index has been on the rise, interest rates continue to firm following the Fed’s first rate cut a month ago, and the threat of higher oil prices amid renewed geopolitical tensions is a worry. These are key potential macro headwinds, and while they may not be fully felt in earnings updates from multinationals in the weeks ahead, Q4’s stout bottom-line growth rate could be called into question (not to mention 2025’s lofty S&P 500 EPS estimate).

Those in the C-suite don’t seem too worried. Dividend-increase announcements are on the rise according to Wall Street Horizon data, while corporations continue to be big buyers of their own stock.2 Throw in upper-end consumers who don’t seem to quit spending and the potential for improved economic activity from China following a bazooka stimulus package announced earlier this month, and the bull train has pressed on.

There are certainly risks out there, but take a step back in time to a year ago. Global stocks were in the throes of an old-fashioned 10% market correction, led lower by mega-cap tech. Worries about a potential war in the Middle East, lasting inflation, and a protracted period of high interest rates (remember “higher for longer”?) had the bears feeling in command as the fourth quarter began. The bulls eventually took charge, though, and the S&P 500 is up by more than 35%, dividends included, from 12 months ago. In fact, the bull market itself just blew out the candles on its second birthday last weekend.