May 8, 2023

The 7 Best Dividend Growth Stocks to Buy

 

Adding dividend growth stocks to your portfolio can provide both income and capital appreciation over the long haul. That makes these picks worth a closer look.



There are two ways to think about dividend growth stocks.


You can view them as companies consistently increasing their annual dividend payment, such as the Dividend Aristocrats. These are individual S&P 500 stocks that have raised their dividend annually for 25 consecutive years or more, and are widely considered to be Wall Street's best stocks to buy for dividend growth.


Or you can view them by the rate at which they are currently growing their dividends, as well as their top and bottom lines. In other words, as both dividend and growth stocks.


In any event, dividend growth stocks have outperformed in various market environments, according to global investment management firm Nuveen.


"Dividend growth stocks have provided an attractive combination of earnings and cash flow growth potential, healthy balance sheets and sustainable dividend policies," the firm's website states. "These stocks have historically offered compelling performance during up markets and provided a buffer during market drawdowns and in volatile environments."


Indeed, as Dan Burrows, Kiplinger's senior investing editor, explains in his article about the best dividend stocks, "regular dividend increases lift the yield on an investor's original cost basis. Stick around long enough, and the modest yield you received on your initial investment can hit double digits one day."



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