Dividend Growth Stocks Pay Off
Fear of the unknown keeps many investors up at night. What if the economy flatlines? What if the stock market tanks?
But there’s one aspect of investing you can hang your hat on: dividends. If you own a solid dividend growth stock, you’re almost certain to receive a check each quarter.
For me, at least, collecting those dividends makes it easier to sleep at night. Who doesn’t like watching those checks pile up in their brokerage account?
And here’s the best part: you can forecast the moves of some stocks so easily that it’s possible to know not only when the next check will roll in, but also when the firm will increase its distributions.
For me, a growing dividend represents the calling card of a wonderful business. So with this theme in mind, I’ve put together a list of five top dividend growth stocks. And based on their historical track records, all five of these companies will likely boost their distributions in the next month or so.
Boeing Co
Don’t let Boeing Co’s (NYSE:BA) modest two-percent yield trick you; this stock has emerged as a dividend growth machine. Over the past five years, management has boosted the distribution at a 34% compounded annual clip.
The company has benefited from a booming defense business and big gains in commercial aviation. Analysts project that the company will deliver another dividend bump when it next reports earnings, and that there will be another big round of lucrative share buybacks.
Enbridge Inc
Enbridge Inc (NYSE:ENB) owns thousands of miles of pipelines in addition to terminals, storage facilities, and processing plants across the country. These facilities ship, store, and refine the energy that powers our daily lives. But rather than make the big bet on discovering these commodities, Enbridge is content to earn steady fees moving them around.
It’s a profitable business that lends itself to predictable dividends. Enbridge has boosted its distribution for 20 consecutive years. Analysts expect another dividend increase when the company reports its full-year results.
Hormel Foods Corp
Last year, Hormel Foods Corp (NYSE:HRL) increased its dividend by 10%, marking the food maker’s 52nd consecutive annual distribution increase. In fact, the last time the company didn’t boost its payout, Lyndon Johnson sat in the White House.
Hormel is a company that knows how to spread the wealth; through 2017, management paid out $419.0 million to shareholders in combined dividends and stock buybacks. And there’s more where that came from: analysts project that the company will boost its distribution by another 10% in late November.
Waste Management, Inc.
Investing in “boring” businesses won’t knock your socks off, but it can pay off over the long haul. Businesses that sell essential products and services tend to bring in steady gains. Customers have to buy their products, even during a downturn.
Waste Management, Inc. (NYSE:WM) serves as a good example of this; even if the economy goes into the gutter, people still need to get rid of their trash. That has translated into steady, ongoing dividend hikes for shareholders. And as per the company’s annual tradition, analysts won’t be surprised to see another distribution boost before the year-end.
Bank of Montreal
Owning a Canadian bank amounts to a license to print money. Five financial institutions control 80% of the deposits. Such raw size allows for significant economies of scale, keeping out any smaller competitors. Better still, high switching costs tend to keep customers from moving their deposits.
For Bank of Montreal (NYSE:BMO), this comfortable situation has allowed the business to pay out dividends every year since 1829—the longest streak of consecutive payments of any company in North America. Don’t be surprised to see management boost the distribution again in December.