Two leaders in the industrials sector just significantly increased their dividends, while another behemoth is very likely gearing up to do the same. The industrial sector has been resilient so far in 2025, even as the returns of the general market have been disappointing.
As of the June 20 close, the S&P 500 industrials sector is the best-performing among all 11 in index tracks. S&P 500 Industrials performance is most easily tracked using the Industrial Select Sector SPDR Fund (NYSEARCA: XLI). The fund has provided an approximate total return of 8.4% on the year, outpacing the second-best performing sector, utilities, by around 1%. Meanwhile, the S&P 500 as a whole has a total return of less than 2%.
Adding to the good news within the sector is the fact that some of its most important names have already raised their dividends or clearly plan to raise them. Below are these three names.
They are all considered leaders in industrials and in the specific parts of the industrials sector they serve. All market cap, return, and dividend yield figures use data as of the June 20 close.
DAL: The Biggest Name in Airlines Lifts Dividend by 25%
First up is Delta Air Lines (NYSE: DAL). The company clearly stands out as a leader in its part of the economy. Delta is the world’s most valuable stock in the passenger airlines industry, with a market capitalization of approximately $31 billion. On June 19, Delta announced a very sizable increase to its quarterly dividend of 25%.
The company will pay its next $0.1875 per share dividend on Aug. 21 to shareholders of record as of the close of business on July 31. This next quarterly dividend equates to an annual payout of $0.75 per share. This gives Delta shares an indicated dividend yield of nearly 1.6%.
Among the six U.S. passenger airline stocks with market capitalizations over $5 billion, Delta is one of only two that pay dividends. Another interesting detail about Delta is that Wall Street analysts appear notably bullish on the stock. The MarketBeat-tracked consensus price target of just under $62 implies over 30% upside in shares.
CAT: Machinery Mammoth Extends Dividend Increase Streak to 31 Years
Next up is the approximately $170 billion industrials stock Caterpillar (NYSE: CAT). The firm is the most valuable U.S. stock in the machinery industry.
On June 11, Caterpillar raised its quarterly dividend by 7% to $1.51 per share. This next dividend will be payable on Aug. 20 to shareholders of record at the close of business on July 21. The company notes that this marks 31 years in a row in which it has increased its dividend.
Overall, the expected annual dividend payment of $6.04 gives the stock an indicated dividend yield of just under 1.7%. This yield is essentially in the middle of the pack among U.S. large-cap stocks in the machinery industry.
Yields within this group currently reach around 5%, exemplified by Stanley Black & Decker (NYSE: SWK).
Airbus’s Payout Range Increase Foreshadows Dividend Boosts to Come
Airbus Group (OTCMKTS: EADSY) takes the final spot. The company's leadership position is evident as it is one of the world’s five largest stocks in the aerospace and defense industry. Airbus is also known for being part of the essential duopoly when it comes to commercial aircraft manufacturing, along with Boeing (NYSE: BA). Officially, Airbus has not recently declared an increase in its dividend. However, a June 18 business update strongly suggests that increases are on their way.
Companies often decide how large a dividend they will pay by setting a payout ratio range. The payout ratio describes what percentage of a company’s earnings it will pay out as dividends. The company’s previous payout ratio range was 30% to 40%. Now, the firm is raising the upper end of that range to 50%.
This means that the percentage of its earnings it pays out as dividends is likely to rise. Analysts also see the company’s earnings per share growing significantly over the coming years. These two factors set up a likely scenario in which the company’s dividend will increase, possibly by a very significant amount. Currently, Airbus has a dividend yield of approximately 1.4%.
Overall, the steps these companies are taking to increase their capital returns are strong news for current or potential shareholders. Notably, the yield of all these names is higher than the approximately 1.2% yield offered by the S&P 500 Index.
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