Time for another ‘Article of Interest’ post. This is the 15th post in this series, with the previous one posting last month. This time I point you to another Kiplinger’s article, which was released about 2 weeks ago. This article lists 10 dividend growth stocks that sport healthy 5-year average dividend growth rates, and which can generate enough cash to keep the hikes coming in the foreseeable future.
To recap the intent of this series… every now and then, when perusing investing or personal finance articles across the Internet, I come across what I call an ‘Article of Interest’, or ‘A of I’ for short.
I decided it might be helpful to share a link to the article(s) in case some of my visitors would find it of interest as well.
In most cases, the articles will focus on dividend-paying stocks or dividend growth investing (DGI). However, other finance-related topics might be highlighted, too.
Now that we are up-to-speed, let’s see what this A of I is about…
Link Overview
Over the past year, we saw plenty of companies choose to cut or suspend their dividend as they managed their way through the pandemic. However, the majority of companies were able to maintain their dividend payout. Even better, many companies managed to raise their dividend.
Having companies in your portfolio that raise their dividend payouts during both good and bad times puts you in a wonderful position. That increasing income allows you to reinvest more, or provide a boost to your spending.
When Kiplinger’s went looking at dividend growth stocks, they started with stocks averaging at least 7% dividend growth over the past 5 years. In addition, they attempted to select stocks from different sectors/industries in an effort to provide a diversified list of companies.
For the 10 stocks they chose, the 5-year average dividend growth rates range from 7.1% to 16.5%.
In addition, the dividend yields range from a low of 1.2% to a high of 3.7%, with most hovering around the 2.0% mark.
With strong dividend growth over the course of a few years, stocks with average yields can look like standouts, as the dividend raises can quickly boost your yield on cost.
Given the choice between a high yield coupled with average dividend growth, or an average yield coupled with high dividend growth, I’ll take the latter. Given that my holding period is for the long-term, I believe the stocks with the strong dividend growth will provide the best results for my Portfolio.
Each stock making the list comes with a brief status/review, as well as the following info:
- Market Value
- Industry
- Dividend Yield
- 5-Yr. Avg. Dividend Growth
- Payout Ratio
The stocks are listed in order of increasing 5-year dividend growth rates.
I found that I own 5 stocks on the list of 10 (each of the last 5). I would have shared 6 stocks from the list if not for one of my most recent sales – Sysco (SYY).
For the 5 stocks that I own from the article list, below I share how I track the dividend growth over 4 different reporting periods, showing both shorter-term and longer-term dividend growth rates.
How many of the 10 stocks from the article are already present in your portfolio? Do you have a minimum criteria for 3-year or 5-year dividend growth rate before adding a stock to your portfolio?
I hope you find the article useful and/or enjoyable. As always, please share your thoughts once you’ve had a chance to read the material.
See you next time…