Dividend Stocks with Growth
The best part about dividend stocks is that they’re dependable.
No one can tell where the market is going next. Dividends, though, tend to come in on a regular schedule.
If you own shares in a solid dividend stock, you’re almost certain to get paid each quarter. And, for me at least, that makes it easier to stomach the market’s ups and downs.
But it gets better. Sometimes you can know not only when the next payment will arrive, but also when a firm will raise its dividend.
This payout growth—along with increasing sales and profits—is the hallmark of a great investment. With this in mind, I put together a list of seven dependable dividend stocks. These firms are so dependable, in fact, they’re almost certain to raise their payouts in the next few months.
1. Apple Inc.
You don’t often think of tech stocks when it comes to dividend investing. Apple Inc. (NASDAQ:AAPL) may be an exception. The firm started cash payouts in 2012, hiking its dividend several times since.
More increases may be on the way. Last week, CEO Tim Cook recommitted to raising its dividend each year. More details, executives promised, will be released in April. (Source: “Apple Inc CEO Tim Cook commits to annual dividend hike,” Financial Post, February 26, 2016.)
2. TELUS Corporation
My boldest call for 2016: Canadian telecom giant TELUS Corporation (NYSE:TU) will raise its dividend in May. But how can I be so sure?
Well, the firm has hiked its payout every other quarter since 2010. Management has flat out promised to raise the dividend right on the company web site. Unless there is some sort of crisis this spring, I don’t expect TELUS will end this tradition anytime soon. (Source: “Investor Relations; Dividend information,” TELUS Corporation web site, last accessed February 28, 2016.)
3. Enbridge Inc.
Enbridge Inc. (NYSE:ENB) is one of the most reliable dividend payers around. The stock is also one of the most dependable. Executives have even promised to raise the company’s distribution by 14% to 15% per year through 2019. (Source: “Investor Center; Stock Information; Dividends, Securities and Tax Info,” Enbridge Inc. web site, last accessed February 28, 2016.)
Of course, those dividend hikes aren’t in the bag just yet. Any increases will depend on Enbridge’s future profits and cash flow. Management, though, wouldn’t have raised investors’ hopes unless they were sure they could deliver.
4. The Southern Company
Simple. Stable. Lucrative. The Southern Company (NYSE:SO) is a well-run power company serving millions of customers across the country. They turn their lights on. You get a 4.5% dividend.
But while the stock is as exciting as a mashed potato sandwich, shares have been a dividend growth machine. The Southern Company has hiked its payout for 14 consecutive years. I wouldn’t be surprised to see another increase in April.
5. Altria Group, Inc.
Cigarettes, though morally dubious, make for a wonderful business. They cost a penny to make. You sell them for a dollar. And they’re addictive.
As a result, Altria Group, Inc. (NYSE:MO) has been a great investment. The company has delivered decades of dividend growth, on top of noteworthy capital gains. Expect another payout hike this summer.
6. Verizon Communications Inc.
The landline business died years ago. The wireless boom is coming to an end. For these reasons, Verizon Communications Inc. (NYSE:VZ) is looked down upon, because future growth will be meager at best.
That said, the firm has still passed on solid dividend hikes to its investors. Last September, the company announced its ninth consecutive distribution increase. Given the fact that cable bills show no sign of dropping anytime soon, you can expect another dividend hike this fall.
7. The Kroger Co.
Don’t let anyone tell you otherwise: in business, size matters. When I’m putting my money on the line, I want to bet on the biggest, meanest kid on the block.
Case in point: The Kroger Co. (NYSE:KR). Despite being in a mature industry, the company has been gaining market share. Thanks to its sheer size, the grocer is able to undercut rivals.
And this has been a profitable formula for shareholders. Kroger has hiked its dividend in eight out of the past nine years. You can likely expect another increase this summer.