These solid companies have non-prohibitive valuations and could feasibly double their payouts within the next five years.
Any company that can double its dividend over a five-year
stretch is delivering rapid payout growth. To reach that target, the company
would need to raise its distribution at an average annual rate of roughly 15%
over the stretch. Of course, doubling your dividend payout in every five-year
period is a lofty target, and taking extra time to clear that bar shouldn't be
taken as a negative, but investors seeking dividend growth can generally feel
very satisfied if that standard is met.
To get an idea of stocks that stand a good chance of
doubling their payouts over the next five years, it helps to look for companies
that are paying out a relatively small portion of their earnings and free cash
flow (FCF), have catalysts to improve cash flow going forward, and have a history
of regular payout growth. Read on to see why Apple (NASDAQ:AAPL), Southwest
Airlines (NYSE:LUV), and Hanesbrands (NYSE:HBI) are attractive stocks that
could double their payouts in the not too distant future.
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