Dividend Aristocrats – those companies that have improved
their payouts annually for 50 years or more – have a mixed reputation. Sure,
they’re great for dividend growth, but the likes of Coca-Cola and Procter &
Gamble give off the impression that price returns can be difficult to come by.
But dividend growth and actual performance don’t have to be
an either/or proposition. Today, I want to show you five dividend growth stocks
that will prove just that.
Why would any investor think poorly of the height of dividend
nobility? After all, the ability to crank out more cash every year without
interruption for half a century is a testament to not just a company’s
market-share dominance and fiscal responsibility, but also the agility to
survive and remain relevant across decades of market and economic shudders.
Coca-Cola is exactly what can happen within the ranks of the
Dividend Aristocrats, and why membership in this “elite” group shouldn’t be
considered an automatic seal of approval. Yes, Coca-Cola remains the most
dominant brand in soda, with Diet Coke sitting at (a distant) No. 2. But KO
also has found itself in the unenviable position of ruling a slowly dying area
of the market, without the diversification of a PepsiCo, which also deals in
snacks. As a result, both its shares and its dividend growth have lagged the
broader market, as represented above by the SPDR S&P 500 ETF.
That said, there are dividend growth stocks with exciting
prospects at the moment. They are squarely positioned to benefit from several
mega-trends that are unfolding as we speak. Here’s a look:
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