The chip king is finally cutting bigger checks, but Wall Street is still fixated on its AI fortune. Nvidia's May decision to lift its quarterly payout from $0.01 to $0.25 per share got buried in the hype, despite a rare comeback for dividend growth stocks. They're keeping pace with the broader market in an up year that would normally leave them in the dust.
Cash is king again: In absolute terms, Nvidia's payout is enormous, with ~$25B a year heading to shareholders. That puts the chip giant among the largest dividend payers in the US, despite a yield below 1%. Bank of America sees a broader opportunity in companies with cash to spare, flagging non-AI names as S&P 500 free-cash-flow yield sits at record lows.
- Amazon, Alphabet, Meta, Microsoft, and Oracle may post $141B in combined negative free cash flow.
- Allstate offers an 18% free-cash-flow yield and a ~1.8% dividend yield, with shares up roughly 17% year to date.
Where The Payouts Are Actually Growing
Healthcare has been carrying dividend growers in 2026, with Johnson & Johnson, Merck, and UnitedHealth all enjoying stellar years. Energy added another boost as the Middle East conflict pushed oil prices higher and lifted profits at ExxonMobil. The strength extends beyond US stocks, with the Thornburg Investment Income Builder fund returning 28.2% over one year, nearly double its category’s 14.5% gain.
- Thornburg bought Kimberly-Clark near $90 this year, attracted by its 5% dividend yield and the income potential of the consumer staples giant.
- Citigroup yields 1.93%, with Thornburg manager Brian McMahon seeing potential for dividend growth to reach high-single or even double digits.
The other side of the ledger: Roughly 19% of global dividend announcements last quarter were cuts rather than increases, the highest share since Q2 2020. McKinsey's review of ~1.2K companies found virtually none cut payouts voluntarily to fund growth. Most were responding to crises or falling profits. With 10-year TIPS real yields near 2.6% against the S&P 500's ~1.4% forward dividend yield, stocks face stiff competition for income dollars. The biggest yield on the screen means nothing if the profits behind it disappear.
