/Lowe)
During times of market uncertainty, it's only natural to wonder where to put your hard-earned cash. Trust me, I've been there.
That's why I like to monitor companies on the Dividend Kings list. These companies have increased their dividends for 50 consecutive years thanks to their ability to generate a steady cash flow. These elite stocks have weathered bull and bear markets for more than five decades and are still chugging along today. Talk about commitment to shareholders!
But yields aren’t everything, and to be perfectly honest, a Dividend King can increase their payouts by $0.01 a share every year, all while keeping their title. That's why today, I'll look at Dividend Kings that have exhibited high dividend growth, and then you can determine if they fit your portfolio.
How I Came Up With The Following Stocks
Those who know me know I don’t like pulling stock analyses out of thin air, so I use Barchart’s Watchlist and its Stock Screener feature to get a list of Dividend Kings with the highest dividend increases. I used the following filters to get my results:
- 5-YR Dividend Growth: Left Blank
- Analyst Rating: 4 (High end of Moderate Buy) to 5 (Strong Buy)
Then, I clicked the “SEE RESULTS” button and got 22 Dividend Kings. I sorted the list from highest to lowest dividend growth in the last 5 years by clicking the 5Y Div% column. To be sure, this 5Y Div% column tells us how much the dividend has grown in the past 5 years- not the stock's current dividend yield.
And for this article, I now have a top three list, starting with the Dividend King with the highest 5-year dividend growth.
Lowe's Companies (LOW)
Home improvement runs deep in American households, and Lowe's Companies is one of the largest. The company offers various products and services for every project under the sun, catering to professionals and weekend warriors. Lowe's mix of big-name brands and in-house labels makes it a one-stop shop for home enhancement.
The home improvement giant recently shared its financials for Q1 2024, which reported a slight dip. Revenue slightly decreased to $21.3 billion from $22.3 billion year over year, while net income fell to $1.7 billion from $2.2 billion.
Despite these small bumps, Lowe's is projecting full-year sales between $84 and $85 billion. The company's impressive 5-year dividend growth rate of 135.14% and breezy 34.99% payout ratio are testaments to its dedication to long-term shareholders.
Lowe's also has a forward annual dividend of $4.60 per share, translating to a 1.95% yield. And, Wall Street analysts strongly believe in Lowe's prospects, rating the company a buy with a score of 4.03 out of 5.
Parker-Hannifin Corp (PH)
Motion and control technologies form the backbone of modern industry, with Parker-Hannifin Corp. leading the charge. The engineering powerhouse doesn't just manufacture components; it breathes life into machines that help push our world forward. Parker-Hannifin's influence spans the global economy through its segments, Diversified Industrial and Aerospace Systems.
Parker-Hannifin Corp's FY 2024 reported revenue was up 5% year over year to a record $19.9 billion. Meanwhile, EPS also reached new heights at $21.84 a share.
Like its fellow Dividend Kings, shareholder value remains a priority for Parker-Hannifin's management. The company has increased its dividend by 99.09% over the five years and offers a forward annual dividend of $6.52 per share, translating to a 1.14% yield. Parker-Hannifin also received a rating of 4.71, a strong buy signal that underscores analyst confidence.
Abbott Laboratories (ABT)
Healthcare innovation is what Abbott Laboratories does best. They are a global innovator reshaping the medical sector. This Dividend King operates across four vital sectors: pharmaceuticals, diagnostics, nutrition, and medical devices.
Abbott Laboratories recently reported its Q2 2024 financials, where sales increased by 4% to $10.4 billion. However, net earnings decreased by 5.3%. Despite that, Abbott remains optimistic about its financial trajectory and projects a full-year diluted EPS range of $3.30 to $3.40.
Dividend growth investors will also appreciate that over the past five years, Abbott has increased their dividend by 82.14% while maintaining a low 47.08% payout ratio. Meanwhile, its latest quarterly payout works out to $2.20 annually, reflecting a 2.03% forward yield. Wall Street analysts rate ABT stock a strong buy.
Final Thoughts
Remember, market dips aren't just nerve-wracking—they're also your chance to grab quality companies at a discount. However, don’t rush in to buy! While dividend growth is impressive, it's not the whole picture. Dig deeper into each company's financial growth prospects, and consider how these stocks fit into your overall investment strategy and risk appetite.
On the date of publication, Rick Orford did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
