These stocks represent the holy grail of income growth
What is the holy grail of dividend investing? Stocks in
strong companies that pay out a high dividend yield. The yield can provide a
steady source of income every quarter, which will hopefully increase over time.
You can even reinvest the dividend back into the company to further bump up
your holding. Plus, dividend growth stocks from financially healthy companies
can also help you to hedge your risk against more volatile stocks.
So how we can pinpoint these elusive stocks? In this case, I
used TipRanks’ innovative stock screener. The screener is a
great way to find stocks that match your investing criteria and have
significant support from the Street’s best analysts. Here I set the filter for
stocks with a “positive,” “high” or “very high” dividend yield and a “strong
buy” top analyst consensus rating.
These are the Street’s top analysts according to their
success rate and average return. I left the other filters open e.g. sector,
market cap, etc. From the list pulled up by the screener, I specifically
searched for stocks with big dividend growth and strong potential rather than
just the current yield rate.
A stock that pays a high dividend yield is ultimately disappointing
in the long-run if the dividend shrinks rather than grows. And a bullish
company with an impressive dividend growth rate is a great sign that the
dividend will continue to go one way: up.
Bearing that in mind, let’s dive in and take a closer look
at these top five stock picks:
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