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Wolfe suggests that these strong companies may be ready to introduce a dividend payout.

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Several notable companies are beginning to make dividend payments this year, according to a report from Wolfe Research. Big names such as Salesforce, Meta Platforms, and Alphabet have already started distributing dividends to investors. Alphabet, for instance, recently authorized its first-ever dividend of 20 cents per share, along with a $70 billion share buyback. This move by Alphabet is seen as a positive step, but the real excitement lies in the potential for growing dividend payments to investors, as Charlie Gaffney, managing director at Morgan Stanley Investment Management, pointed out.

Wolfe Research has identified a few more companies that might be on the cusp of initiating dividend payments. After a period of minimal dividend initiations in recent years, there has been an uptick in announcements over the last 6-12 months, according to Chris Senyek, chief investment strategist at Wolfe. The firm screened for potential dividend initiators based on criteria such as strong free cash flow yields, current share buybacks, and low leverage. Some of the companies that made the list include Skechers, O’Reilly Automotive, and PayPal.

Skechers, a footwear manufacturer, is one of the companies highlighted by Wolfe as a potential dividend initiator. The company has seen a 13% increase in shares in 2025, with an estimated 2024 free cash flow to firm yield of 3%, according to Wolfe’s analysis. Analysts have also shown support for the stock, with 11 out of 14 analysts covering Skechers rating it a buy or strong buy. Similarly, O’Reilly Automotive has been named as a potential dividend initiator by Wolfe, with an estimated 3% free cash flow to firm yield in 2024. Despite a modest 1.5% increase in shares in 2024, the company remains liked by analysts, with 64% rating it a buy or strong buy.

PayPal is another company on Wolfe’s list of potential dividend initiators. The company has an estimated free cash flow to firm yield of 7% for 2024, according to Wolfe’s analysis. While the stock has only seen a 1% gain year-to-date, 20 of the 47 analysts covering the name rate it a buy or strong buy. Consensus price targets also suggest a 22% upside from current levels. In fact, Morgan Stanley has also highlighted PayPal as a potential dividend issuer, adding it to a list of companies with a “net cash position and sufficient free cash flow” to support initiating a dividend.

Other companies mentioned by Wolfe as potential dividend initiators include Mattel, Fiserv, and Centene. These companies are being closely watched by investors and analysts for any indications that they may start distributing dividends to shareholders. With more companies beginning to pay dividends, investors are likely to have more options when it comes to generating income from their investments. This trend could lead to new opportunities for investors seeking to add dividend-paying stocks to their portfolios.

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