Two top dividend stocks to watch in Q3: AXP, RTX

July 25, 2022 05:58 AM PDT | By Mridul Gogoi
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  • American Express Company (NYSE: AXP) has a quarterly dividend of US$ 0.52 per share.
  • Raytheon Technologies Corporation (NYSE: RTX) has a quarterly dividend of US$ 0.55 per share.
  • Dividend payments influence the share price. 

A dividend is a great differentiator for investors when choosing companies to invest in. Dividend-paying companies are usually the established ones with significant market capitalization. The sectors with a regular history of paying dividends include oil & gas, basic materials, healthcare, banks and financial, and utilities. 

Dividends are rewards for shareholders for their investment in the company, a feel-good factor that also helps maintain their trust. When a company announces a high-valued dividend, it gives the impression that it is doing well and generating great profits.

Here, we will look at two dividend stocks to watch during the third quarter of fiscal 2022, AXP and RTX:

American Express Company (NYSE: AXP): 

New York-based American Express Company (NYSE: AXP) is a market leader in personal, corporate, and small business credit cards. It also provides travel-related services to consumers. Known for raising its dividends and paying investors for the last 30 years, AXP, however, paused its dividend growth in 2020 and 2021 due to the impacts of the Covid-19 pandemic. 

The current quarterly dividend of American Express Company is US$ 0.52 per share, which was raised by 20 per cent in March. 

AXP has been earmarking close to US$ 403 million to pay quarterly dividends. The company’s free cash flow every quarter comes in at US$ 2.36 billion in the last five years. As of March 2022, Berkshire Hathaway was the leading shareholder of American Express Company. 

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Raytheon Technologies Corporation (NYSE: RTX)

Raytheon Technologies Corporation (NYSE: RTX) is an American multinational aerospace and defense company involved in defense manufacturing and intelligence services. RTX generated US$ 37 million in free cash flow in Q1, 2022, while its operating cash flow was US$ 476 million. 

Raytheon Technologies currently pays a dividend of US$ 0.55 per share and has been raising its dividends for the past 28 years. RTX expects a free cash flow of US$ 6 billion in 2022, which could translate into higher dividends for investors.

Bottom line

Dividend payments influence the share price.  The price may rise on the declaration, commensurate with the amount of the dividend announced. It also declines by a similar amount at the opening session of the ex-dividend date. 

Dividends can be given through several options, like stocks, mutual funds, and exchange-traded funds (ETFs)


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