In this video, I’m going to analyze 10 high-growth dividend stocks.
These are companies that reliably increase their dividend payments on an annual basis,
averaging over 10% growth.
Dividend Growth Stocks can be fantastic long-term investments, compounding over time, eventually
paying out significant dividend income that you could live off of.
If you stick around to the end, I’ll have a few bonus stocks that just barely missed
the cut.
My name is Zach and you should leave a like and subscribe to the channel if you enjoy
the video.
The research tool I’m going to be using throughout this analysis is my own dividend
investing software, which is available at DividendData.com.
It allows me to analyze my portfolio, track my dividend income, and conduct in-depth research
on companies.
If you like what you see, then sign up at dividenddata.com.
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Stock number 1 is Lowe’s, ticker symbol LOW.
This home improvement retailer currently operates 1,971 stores, while also selling its products
online.
The company has fast-growing earnings, resulting in massive dividend growth.
Over the past 10 years, the compound annual growth rate of their dividend is 19%.
Their most recent dividend increase was over 33%, which is massive.
This will likely trend down closer to 10-15% long-term.
The current payout ratio is 23%, giving lots of room to grow the dividend over time, reinvest
in the business, and buy back shares.
Lowe’s has been buying back shares at a high rate over the past 15 years.
The company has grown its free cash flow per share, at a 19% CAGR over the past 10 years,
matching its dividend growth.
Lowe’s seems to be a reliable dividend growth machine for your portfolio.
The current dividend yield is 1.6%.
An honorable mention here is Home Depot, ticker symbol HD, which is very similar to Lowe’s.
Its dividend growth is slightly lower and its payout ratio is higher.
Comment below if you want to see a full video comparing Lowe’s and Home Depot Stock.
Stock number 2 is Intuit, ticker symbol INTU.
This is a software company that owns Turbotax, Quickbooks, Mint, Credit karma, and Mailchimp.
They focus on financial and business software for individuals, small businesses, self-employed,
and accounting professionals.
Historically, Tubrotax has been their largest business, making their earnings highly seasonal.
However, through their 2021 acquisition of Mailchimp and the growth of other businesses,
Inuit is building reliable subscription revenue throughout the year.
The company has a low starting dividend yield of 0.54% but attempts to make up for that
with growth.
The dividend has a ten-year compound annual growth rate of 16.6%.
Their latest dividend increase was 15.25%.
The payout ratio is 31% based on net income, but 23% based on free cash flow.
They have plenty of room to continue growing the dividend and reinvest in the business.
Their free cash flow has grown at a 16% CAGR over the past 10 years and 28% over the past
5 years.
With Intuit, I think you can expect reliably high growth rates in the future.
Stock number 3 is Domino’s Pizza, ticker symbol DPZ.
Yes, the Pizza Company.
Although it may be surprising this company is a growth machine, consistently opening
new stores, with a simple menu, and a great food delivery service.
Its earnings are growing at a high rate and it currently trades at a 1% starting dividend
yield.
Over the past 5 years, the compound annual growth rate of the dividend is 20%.
They just had a 17% dividend increase.
The payout ratio is 27% so there is plenty of room for growing the dividend, reinvesting
in the business, and buying back shares.
Dominos has had large share buybacks over the past decade.
The company is growing its free cash flow per share at a 27% 10-year CAGR.
Domino’s seems like a dividend growth machine.
Stock number 4 is Visa, ticker symbol V.
This is the largest global digital payment network.
Visa has reliable earnings growth and is currently trading at a 0.7% starting dividend yield.
Over the past 10 years, the compound annual growth rate of the dividend is 21% and over
the past 5 years, it’s 17.55%.
They just had a 17% dividend increase.
The payout ratio is 22%, leaving lots of room for dividend growth.
This is a super high margin business, with low operating expenses.
It’s highly scalable, meaning more profits do not raise expenses significantly.
This frees up a significant amount of capital to be paid out as dividends, reinvested back
into the business, or used to buy back shares.
They have been consistently buying back shares over the past decade.
I think Visa is a great long-term dividend growth stock and I made a full stock review
video on the channel.
An honorable mention here is Mastercard, ticker symbol MA, which is the second-largest global
digital payment network.
It’s very similar and comment below if you want a full video comparing Visa and Mastercard
Stock.
Stock number 5 is Microsoft, ticker symbol MSFT.
This software giant owns Windows, Office 365, Azure Cloud, Xbox, LinkedIn, Visual Studio,
Github, and much much more.
Microsoft has reliably fast-growing earnings and is currently trading at a 0.8% starting
dividend yield.
Over the past 10 years, the compound annual growth rate of the dividend is 11.9%.
They just had a 10.7% dividend increase.
The current payout ratio is 26% so there’s plenty of room to grow the dividend, reinvest
in the business, and buy back shares.
They’ve been consistently repurchasing shares.
Free cash flow per share has been growing at a 10% ten-year CAGR and 19% over the past
5 years.
In recent years, the growth rate has accelerated which is interesting for a company as large
as Microsoft.
This is one of the best dividend growth stocks and I cover it frequently on the channel.
Stock number 6 is Broadcom, ticker symbol AVGO.
This semiconductor company designs, develops, and supplies various semiconductor devices
and Infrastructure Software.
Broadcom has grown its earnings at a high rate and is currently trading at a 2.6% dividend
yield.
The 10-year CAGR of the dividend is 43%, 31% over 5 years, and 17% over 3 years.
Dividend growth is slowing down, with its latest increase being 13.89%.
The payout ratio is 92% of GAAP net income, but 50% of free cash flow.
Free cash flow is the more relevant metric here.
Free cash flow per share is growing at a high rate.
However, the rate of growth has started tp slowed in recent years.
It’s still very impressive though.
Comment below if you want a full stock review of the company.
Stock number 7 is Texas Instruments, ticker symbol TXN.
This semiconductor company develops analog and embedded chips.
Their earnings grow at a high rate and it has a current dividend yield of 2.5%.
Over the past 10 years, the CAGR of the dividend is 21%, 18% over 5 years, and 14% over 3 years.
Their most recent dividend increase was 12.75%.
The payout ratio is 50%.
TXN has bought back stock reliably over the past decade.
Their free cash flow also grows at a high rate.
Recently, I made a full stock review video on the company.
Stock number 8 is Abbvie, ticker symbol ABBV.
This is a pharmaceutical company that spun out of Abbott Laboratories in 2013.
Their earnings grow at a high rate and they currently trade at a 3.5% dividend yield.
Over the past 5 years, the CAGR of the dividend is 17.44% and the 3-year CAGR is 10%.
Abbvie’s most recent dividend increase was 8.4%.
Their payout ratio is 45% of free cash flow.
It’s growing free cash flow per share at a 24% CAGR over the past 5 years and 13% over
the past 3 years.
Financially, Abbvie has been a dividend growth machine.
Stock number 9 is UnitedHealth Group, ticker symbol UNH.
This is a diversified healthcare company, operating in insurance, services, and software.
Their earnings reliably grow and it’s currently trading at a starting dividend yield of 1.1%.
Over the past ten years, the CAGR of the dividend is 24.3%, 18% over the past 5 years, and 17%
over the past 3 years.
The most recent dividend increase was 16%.
The payout ratio is 30%, leaving lots of room for growth.
The free cash flow per share has grown at 14% 10-year CAGR and 19.8% 5-year CAGR.
Dividend Growth will likely continue at a high rate.
Stock number 10 is T Rowe Price Group, ticker symbol TROW.
This asset management company provides mutual funds and advisory services.
TROW grows earnings at a high rate and pays a fast-growing dividend with large special
dividends.
Over the past 10 years, the CAGR of the dividend is 14%.
Its most recent dividend increase was 11%.
The payout ratio is 35%, excluding years with special dividends.
Free cash flow per share has grown at a 15% CAGR over the past 10 years.
During the l last 5 years, TROW has been buying back shares at a sizeable amount.
I think this is an attractive stock at current prices and recently made a full stock review
video.
So that’s a brief overview of my top 10 dividend growth stocks.
Honorable Mentions that just missed the cut include Starbucks, Costco, Nike, Sherwin Williams,
and Kroger.
Comment below if you want to hear more about any of these stocks.
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