To The Moon

KEY POINTS

• Stock markets fell sharply on Tuesday amid fears of Fed tightening.
• Microsoft increased its quarterly dividend.
• Investors can look to Emerson Electric, McDonald's, and ExxonMobil for likely dividend increases in the near future, based on past experience.

A few candidates typically announce payout increases this time of year.

The stock market suffered a setback on Tuesday, giving back gains from Monday's session amid renewed fears about what the Federal Reserve might do when it concludes its two-day monetary policy meeting on Wednesday. Losses for the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite amounted to roughly 1%, with small-cap stocks taking relatively larger hits than their large-cap counterparts.

As the stock market becomes more volatile, investors are increasingly appreciating companies that reward them with predictable and growing streams of dividend income. Today, Microsoft (MSFT -0.85%) announced that it would boost its quarterly payout to shareholders. The tech giant pays a relatively modest yield, but some other dividend-stock stalwarts are also in line to pay more to their investors in the near future. Read on to learn more about Microsoft as well as three other companies that could give similar rewards to shareholders soon.

A higher payout for Microsoft

Microsoft stock didn't do all that well on Tuesday, losing almost 1% in the regular trading session. However, long-term investors will get a little bit more from the software giant in the form of higher dividend checks.

Microsoft's board of directors declared a quarterly dividend of $0.68 per share. Shareholders of record as of Nov. 17 will receive the higher payout, which will show up in investors' accounts on Dec. 8. The payout is $0.06 higher than the previous $0.62 per-share quarterly dividend.

With a dividend yield of only about 1%, most investors don't think much about Microsoft as a dividend stock. Yet the company has developed a solid track record of boosting dividend payouts over time, with the latest move making 2022 the 20th straight year in which Microsoft has paid more in annual dividends than in the previous year.

These companies could be next

Many companies have even longer track records than Microsoft in paying higher dividends. For instance, the following three companies typically announce their dividend increases around this time of year:

• Emerson Electric has an impressive 65-year track record of paying higher dividends to its shareholders. The company's most recent increase came last November when it announced a 2% boost to $0.515 per share on a quarterly basis.
• Fast-food giant McDonald's $(MCD)$ made a larger payout boost late last year, increasing quarterly dividends by $0.09 to $1.38 per share. The Golden Arches chain has a 47-year streak of paying higher dividends for long-term shareholders.
• ExxonMobil has a 40-year dividend-increase streak on the line as it enters the final months of the year. Last year's most recent payout boost added just a single penny to the quarterly payout, with shareholders receiving $0.88 per share each quarter.

There's no guarantee that these companies will follow through with dividend increases. Every year, there are often at least a few long-paying dividend stocks that have to make payout cuts or even suspend their payouts temporarily.

However, all three of these blue-chip stocks have strong businesses underlying them, and they've had the ability to weather difficult economic times in the past and still give their shareholders higher payouts over time. At a time when many investors are feeling increasingly uncomfortable with how much the prices of their stocks have fallen, the extra confidence of knowing that they can receive a quarterly check from these companies is especially valuable.