So you want to be a dividend growth stock investor but your unsure of what exactly a dividend growth stock looks like? Well this article is written for you. Below you will find 6 examples of dividend growth stocks worth your consideration for investment.
What Qualifies as a Dividend Growth Stock?
In order to qualify to be a dividend growth stock, the company must have a history of consistently increasing their dividend payment year after year. Some companies may have a longer history then others. It is up to you to decide what your minimum number of years of dividend increases will be. Some investors may only consider companies that have raised dividends for at least the past 20 years or more while other investors may require only 10 years worth of increases or possibly even less. Personally I look for a company to have a history of at least 5 years worth of dividend increases.
Now just because a company has a history of annual dividend increases which qualifies it to be considered a dividend growth stock does not immediately mean it is a good investment. You must do your own research looking at metrics such as earnings growth and current valuation to determine if it will be a good investment for you.
6 Examples of Dividend Growth Stocks
Below you will find 6 companies that would be considered dividend growth stocks. Just because they have been raising thier dividend payments does not mean they are great investments at this current time. You still need to do your stock research analysis to determine if these would be good investments at the current time.
- Coca-Cola (KO) – Coca-Cola is the world’s largest soft drink company. They sell more than 500 beverage brands across the world. Coca-Cola has increased their dividend every year for the past 50 years.
- Johnson & Johnson (JNJ) - Johnson & Johnson is a large health care firm with products in the pharmaceutical and medical device industries. Their consumer segment markets and sells brands such as Band-Aid bandages and Tylenol pain reliever. Johnson & Johnson has increased their dividend every year for the past 50 years.
- Wal-Mart (WMT) - Wal-Mart is the largest retailer in North America with expansion making way in international markets. Wal-Mart operates discount stores and supermarkets as well as wholesale clubs. Wal-Mart has increased their dividend every year for the past 38 years.
- AT&T (T) - AT&T is a telephone and broadband services company. They have increased their dividend every year for the past 28 years.
- Aflac (AFL) - Aflac is an insurance company providing supplemental health and life insurance. The majority of their earnings arises from sales in Japan. Aflac has increased their dividend every year for the past 29 years.
- McDonald’s (MCD) – McDonald’s is the largest fast-food restaurant company in the world. They operate over 33,000 restaurants around the world selling hamburgers and Happy Meals. McDonald’s has increased their dividend every year for the past 35 years.
These companies are considered dividend growth stocks. There are many other companies in the stock universe that are also good dividend growth stock candidates. It is important to find these companies, analyze them and determine which ones are the best for you to invest in.
Disclosure: I am long KO, WMT, AFL and MCD.
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