Investors looking for high-quality businesses should consider dividend growth stocks. The beauty of strong dividend growth companies is that they pay their investors rising streams of dividend income, regardless of the direction the market is going.

Dividends provide a real return that helps cushion investors’ portfolio against falling stock prices, while giving investors a nice boost when markets are rising. Dividend stocks that increase their dividend payouts each year are even better.

For example, the Dividend Achievers are a group of 266 stocks with 10+ consecutive years of dividend increases.

This article will discuss the top 10 Dividend Achievers, ranked according to their expected returns found in the Sure Analysis Research Database.

Top Dividend Achiever No. 10: AmeriGas Partners

• Expected Annual Returns: 15%-16%

AmeriGas Partners (APU) is the largest propane distribution company in the United States, serving nearly 2 million customers in all 50 states through approximately 1,900 distribution locations.Propane sales account for nearly 90% of the company’s annual revenue, with related equipment and accessories accounting for the remaining 10%. AmeriGas has a market capitalization of $4.4 billion. UGI Corporation is AmeriGas’ general partner and also owns 26% of the partnership’s common units.

Fortunately, conditions should improve in 2018. The company’s two main growth catalysts are its recent cylinder exchange program, and customer account growth. AmeriGas’ growth driver is to slowly consolidate the fragmented propane distribution industry. The partnership made five bolt-on acquisitions in fiscal 2017 and more than 80 acquisitions in the last decade. Both initiatives have helped produce growth.

On 4/29/18, AmeriGas reported strong second-quarter results.

Source: Earnings Presentation, page 10

For the quarter, AmeriGas reported 14% adjusted EBITDA growth, due to 18% volume growth for its national accounts program and 15% volume growth for the cylinder exchange program. Volume growth was driven by more favorable weather conditions. Temperatures were 14% colder than in the same quarter last year, which helps boost demand for propane.

AmeriGas has taken steps to restructure its debt load over the past year, to improve its balance sheet. As a result of its refinancing actions, AmeriGas has no significant debt maturities until 2024. The company expects to have an interest coverage ratio of 3.9, using adjusted EBITDA forecasts for 2018.

AmeriGas has traded at an average distribution yield of 7.9% over the past 5 years and an average distribution yield of 7.6% over the past 10 years. The partnership’s current distribution yield of 9.3% indicates that AmeriGas is undervalued. We expect valuation changes to add 1% to annual returns going forward. In addition, we expect AmeriGas to generate 5% annual earnings growth. Combined with the 9.3% dividend yield, total returns could exceed 15% annually.

Top Dividend Achiever No. 9: Leggett & Platt 

• Expected Annual Returns: 15%-16%

Leggett & Platt (LEG) might not have an instantly-recognizable brand, but it has a great reputation among income investors. Leggett & Platt is on the list of Dividend Aristocrats, a group of 53 stocks in the S&P 500 Index, with 25+ consecutive years of dividend increases.

Leggett & Platt has been in business since 1883. Today, the company designs and manufactures a wide range of products, found in most homes and automobiles. Through 130 manufacturing facilities across 19 countries, Leggett & Platt manufactures bedding components, bedding industry machinery, steel wire, adjustable beds, carpet cushioning, and vehicle seat support systems.

Source: Investor Presentation, page 4

Leggett & Platt possesses multiple competitive advantages that are typical of Dividend Aristocrats. It has over 120 manufacturing facilities across the world. In addition, Leggett & Platt has an extensive patent portfolio, which is critical to preserving market share. It has 1,500 patents issued and nearly 1,000 registered trademarks.

Leggett & Platt’s growth will be achieved through organic expansion, as well as acquisitions. For example, in 2017 Leggett & Platt completed three small acquisitions, including a distributor and installer of Geo Components, a surface critical bent tube manufacturer to support its work furniture segment, and a producer of bonded carpet underway.

So far in 2018, Leggett & Platt acquired Precision Hydraulics Cylinders, or PHC, a leading global manufacturer of engineered hydraulic cylinders. The acquisition is expected to add 2% to overall sales growth in 2018. First-quarter revenue increased 7%, while earnings-per-share fell 8%, due to cost inflation. Still, Leggett & Platt expects at least 5% earnings-per-share growth in 2018. We believe Leggett & Platt can generate 6% annual earnings growth over the long-term.

Plus, the stock is significantly undervalued. Leggett & Platt shares trade for a price-to-earnings ratio of 15.4. In the past 10 years, the stock traded for an average price-to-earnings ratio of 19.8. As a result, we believe a return to fair value could add 5%-6% to Leggett & Platt’s annual returns. In addition to a 3.6% dividend yield, total returns could reach 15%-16% per year.

Top Dividend Achiever No. 8: Omega Healthcare Investors 

• Expected Annual Returns: 17%-18%

Omega Healthcare Investors (OHI) is a Real Estate Investment Trust, or REIT. REITs own real estate properties and lease those properties to tenants in select industries. Omega Healthcare owns healthcare real estate, primarily skilled nursing facilities and senior housing. The company operates ~1,000 properties in 42 U.S. states and the United Kingdom.

Source: 2018 Investor Presentation, page 5

The financial health of tenants is a major risk for REITs. Omega Healthcare had a difficult year in 2017, due to tenant issues. The company incurred impairment charges of $198 million in 2017 due to problems related to two tenants, most notably Orianna Health Systems.

Omega’s fundamental performance worsened to start 2018, with a 9.3% decline in adjusted FFO-per-share in the first quarter. On 3/7/18, Omega announced that Orianna will pursue a significant restructuring, which includes certain affiliates of Orianna declaring Chapter 11 bankruptcy. Fortunately, Omega Healthcare reiterated 2018 FFO guidance, and it does not expect further impairments in 2018 resulting from the bankruptcy filing.

Healthcare REITs like Omega Healthcare will benefit from changing demographics in the U.S., specifically the aging population. According to the U.S. Census Bureau, there are 10,000 Baby Boomers turning 65 every day. The sheer size of the Baby Boomer generation will place a great strain on the healthcare industry to meet demand.

Source: 2018 Investor Presentation, page 14

As a result, senior housing and medical facilities should enjoy rising demand and spending from the aging population. Omega Healthcare’s long-term growth trajectory remains intact. In the meantime, the stock has a dividend yield of 8.7%. Omega Healthcare expects to have a dividend payout ratio of 88% in 2018. It also has a strong balance sheet, with an investment-grade credit rating and no material debt maturities until 2022.

We expect Omega Healthcare to grow FFO-per-share by 4%-5% each year moving forward. Combined with dividends and a modest expansion of the valuation, we expect 17% annual returns for the stock.

Top Dividend Achiever No. 7: AT&T Inc. 

• Expected Annual Returns: 18%-19%

AT&T (T) is also on the list of Dividend Aristocrats, and it also has a very attractive 6.2% dividend yield.

AT&T offers a variety of telecom services, including wireless and cable TV, as well as satellite TV through its subsidiary DirecTV. AT&T stock has declined 16% year-to-date, due to heightened competition and uncertainty surrounding the fate of a major acquisition.

AT&T’s first-quarter earnings report disappointed investors. For the quarter, AT&T reported revenue of $38.04 billion and earnings-per-share of $0.85. Revenue and earnings-per-share missed analyst estimates by $1.27 billion and $0.02 per share, respectively.

Source: Earnings Presentation, page 3

AT&T is dealing with the cord-cutting trend, which has impacted its cable and DirecTV businesses, while its wireless segment is under pressure from lower-priced competitors. The major catalyst for AT&T moving forward is the pending $85 billion acquisition of Time Warner (TWX), but the fate of the deal is in doubt. In November the Department of Justice sued to block the proposed transaction, on antitrust grounds. The main portion of the trail recently concluded, with a final decision expected on 6/12/18.

The Time Warner acquisition would be a major boost to AT&T’s growth. Time Warner is a content giant, with a number of strong media properties, including TBS, TNT, HBO, and the Warner Bros. movie studio. If the Time Warner acquisition is approved, the combined company would have over 140 million mobile subscribers, and another 45 million video subscribers, worldwide. Along with 5G rollout and fiber network expansion, the Time Warner deal is among the most important growth catalysts for AT&T.

Source: Earnings Presentation, page 7

In the meantime, AT&T has a highly secure dividend payout. Based on 2018 earnings guidance, the company is on pace for a dividend payout ratio of approximately 58%. Absorbing Time Warner is a costly proposition for AT&T, which ended the most recent quarter with $133.7 billion of long-term debt. Fortunately, AT&T has a solidly investment-grade credit rating of BBB+, and the company generates more than enough cash flow to service its debt and pay its hefty dividend.

According to ValueLine estimates, AT&T is expected to generate adjusted earnings-per-share of $3.45 in 2018. The stock currently trades for a price-to-earnings ratio of just 9.4, compared with an average of 13.4 over the past 10 years. Therefore, we believe the stock is significantly undervalued, and an expanding price-to-earnings ratio could add 8% to shareholder returns each year. Assuming 4%-5% annual earnings growth, AT&T stock can provide returns of 18%+ per year, through a rising valuation, earnings growth, and dividends.

Top Dividend Achiever No. 6: Invesco Ltd. 

• Expected Annual Returns: 18%-19%

Invesco (IVZ) is a financial services company. It provides investment management and a variety of other services, to retail, institutional, and wealth management customers around the world. The company has a market capitalization of $11.1 billion.

Source: Earnings Presentation, page 27

On 4/26/18, Invesco reported strong growth rates for the first quarter. Revenue of $958 million increased 10.5% year-over-year, while earnings-per-share of $0.67 rose 10% from the same quarter a year ago. The 10%+ revenue and earnings growth rates were due to higher assets under management (AUM), as well as favorable market returns. On 5/10/18, Invesco announced April AUM of $934 billion.

Going forward, if the stock market continues to perform well, Invesco’s AUM should continue to grow. In addition, rising interest rates will help Invesco generate higher investment income. Invesco is also growing through acquisitions. On 4/6/18, Invesco completed the acquisition of Guggenheim Investments’ ETF business for $1.2 billion. This acquisition will enhance Invesco’s product offerings in exchange-traded funds, an emerging asset management class that is seeing growing demand.

Invesco has competitive advantages in the asset management industry, thanks to a powerful brand. The company has generated nine consecutive years of positive long-term net inflows.

Source: Earnings Presentation, page 12

ValueLine analysts expect Invesco to generate earnings-per-share of $2.85 in 2018. Based on this, Invesco stock trades for a price-to-earnings ratio of 9.5. We believe a fair valuation for Invesco is a price-to-earnings ratio of 14-15. As a result, a rising valuation could add approximately 8% to total returns. In addition, we believe Invesco can reasonably generate annual earnings growth of 6%. Along with the 4.2% dividend yield, total returns could reach 18%+ per year.

Top Dividend Achiever No. 5: Energy Transfer Equity 

• Expected Annual Returns: 19%

Energy Transfer Equity (ETE) is a Master Limited Partnership, or MLP, which owns and operates energy infrastructure such as natural gas, natural gas liquids, refined products, and crude oil pipelines, as well as retail and wholesale motor fuel operations and LNG terminals. Energy Transfer also owns the General Partner and 100% of the incentive distribution rights (IDRs) of Energy Transfer Partners, L.P. (ETP) and Sunoco L.P. Energy (SUN). Energy Transfer also owns the Lake Charles LNG Company.

Source: 2018 MLP & Energy Infrastructure Conference, page 6

On 5/9/18, Energy Transfer Equity reported first-quarter financial results. Revenue of $11.9 billion rose 23% from the same quarter a year ago. Distributable cash flow (DCF), as adjusted, increased 84% year-over-year.

For midstream energy companies like Energy Transfer Equity, future growth will come from new pipeline projects. On 5/10/18 Energy Transfer Partners announced it will build a crude oil pipeline from the Permian Basin in west Texas to the Houston Ship Channel and Nederland, Texas.

Source: 2018 MLP & Energy Infrastructure Conference, page 17

This pipeline will have an initial capacity of up to 600,000 barrels per day, with future expansion capacity to up to 1 million barrels per day. The company expects the pipeline will be completed by 2020. Energy Transfer Equity will also pursue growth through acquisitions. For example, in the first quarter the company acquired the general partner of USA Compression Partners, LP (USAC) and approximately 12.5 million USAC common units.

Energy Transfer Equity has an attractive distribution yield of 7.3%, and the distribution payout appears to be sustainable going forward. The company reported a distribution coverage ratio of 1.48x in the 2018 first quarter, which means it generated 48% more distributable cash flow than it needed to pay distributions last quarter.

Energy Transfer Equity is expected to generate distributable cash flow of $3.50 per unit in 2018, according to ValueLine analysts. As a result, the MLP currently trades for a price-to-DCF ratio of 4.8, a very low valuation that indicates the units are undervalued. Over the next five years, an expanding valuation could add approximately 8% to Energy Transfer Equity’s annual returns. Combined with expectations of 4% DCF growth and its 7.3% distribution yield, total annual returns could reach 19%.

Top Dividend Achiever No. 4: Walgreens Boots Alliance 

• Expected Annual Returns: 21%-22%

Walgreens Boots Alliance (WBA) is the largest retail pharmacy in both the United States and Europe. The company operates approximately 13,200 stores in 11 countries. It also operates one of the largest global pharmaceutical wholesale and distribution networks, with more than 390 distribution centers that deliver to upwards of 230,000 pharmacies, doctors, health centers, and hospitals each year.

Walgreens stock is a unique opportunity, because it has been negatively impacted by the retail downturn. The so-called demise of brick-and-mortar retailers has taken down Walgreens along with the rest of the industry. Shares of Walgreens have dropped 20% in the past 12 months.

And yet, the company continues to rack up excellent growth. Walgreens reported strong results for the fiscal second-quarter, including 9.4% organic sales growth, along with 27% earnings growth.

Source: Earnings Presentation, page 7

Walgreens grew its Retail Pharmacy segment comparable-store sales by 2.4% last quarter. However, comparable retail sales declined by 2.7% for the quarter, which reflects the weak traffic for traditional brick-and-mortar retail.

The good news is, Walgreens’ niche will allow the company to outlast e-commerce competition. The pharmacy side of the business continues to perform well, with 5.1% comparable sales growth and 4.0% comparable prescription growth last quarter.

Source: Earnings Presentation, page 10

Along with quarterly results, Walgreens raised full-year earnings guidance. The company now expects adjusted earnings-per-share of $5.85 to $6.05 this year. At the midpoint of guidance, Walgreens expects 17% earnings growth for 2018.

Given the company’s strong track record of growth, we believe that 8%-10% annualized growth in earnings per share is feasible for the foreseeable future. In addition, returns will be boosted by Walgreens’ 2.5% dividend yield, as well as a rising valuation.

Based on the midpoint of 2018 earnings guidance, the stock trades for a price-to-earnings ratio of just 10.6. This is well below our estimate of fair value, which is a price-to-earnings ratio of is 16.7. If the company’s valuation can revert to its historical mean over a time period of 5 years, this will add 9%-10% to annual shareholder returns.

Combined with dividends and earnings growth, Walgreens could produce excellent total returns of 21%-22% each year moving forward.

Top Dividend Achiever No. 3: Cardinal Health 

• Expected Annual Returns: 22%-23%

Cardinal Health (CAH) is another Dividend Aristocrat, as it has raised its dividend for over 30 years in a row. Right now is an opportune time to buy this Dividend Aristocrat. Shares of Cardinal Health have declined 30% in the past one year, due to the pressure facing the pharmaceutical distribution industry. Falling prices for pharmaceutical drugs and mounting social and political uproar surrounding the U.S. opioid crisis have eroded investor sentiment.

The most recent quarter reflected the challenges Cardinal Health is facing. Revenue increased 5.7% from the same quarter a year ago, as falling prices has helped lift sales. However, adjusted earnings-per-share of $1.39 declined 9%.

Pharmaceutical segment operating profit declined by 3% last quarter reflecting the margin erosion from price deflation. The medical segment continued to perform well, with revenue and operating profit growth of 15% and 34%, respectively.

Source: Earnings Presentation, page 6

We view the price deflation in the pharmaceutical industry as a short-term event. Healthcare is still seeing robust demand in the U.S, which should remain strong due to the aging population. As a result, prices are likely to at least stabilize over the long-term.

Despite the negative headlines, Cardinal Health is still a highly profitable company, with an entrenched position in its industry. The company expects adjusted earnings-per-share in a range of $4.85 to $4.95 this year. As a result, the stock is significantly undervalued. Based on 2018 earnings estimates, the stock has a price-to-earnings ratio of 10.6, at the midpoint of guidance. We estimate a price-to-earnings ratio of 16.8 as fair value, which is equal to its 10-year average.

Cardinal Health stock could generate 9%-10% annual returns, just from expansion of the price-to-earnings ratio. In addition, we believe the company has potential for 8%-10% annual earnings growth, in a normalized operating environment. Combined with the 3.6% dividend yield, total returns could reach 22%-23% per year.

Top Dividend Achiever No. 2: Owens & Minor

• Expected Annual Returns: 26%-27%

Owens & Minor (OMI) has increased its dividend for 20 years in a row, and currently has a 6.4% dividend yield. The reason for Owens & Minor’s high dividend yield is the massive stock decline over the past year. Shares of Owens & Minor are down by nearly 50% in the past 12 months.

Owens & Minor is a healthcare distribution, transportation, and data analytics company. It provides healthcare products, mainly pharmaceuticals, for hospitals and other medical centers. Its other clients include group purchasing organizations, product manufacturers, the federal government, and at-home healthcare patients.

Source: April Investor Presentation, page 23

Falling prices in the pharmaceutical industry have weighed on Owens & Minor’s already-thin margins. The company’s revenue and earnings-per-share declined 4% and 26% in 2017, respectively. Fortunately, operating conditions improved to start 2018. On 2/10/18, the company released first-quarter financial results. Revenue of $2.37 billion increased 1.7% year over year, thanks to 2.3% revenue growth in the core Global Solutions Group.

Owens & Minor expects to return to growth over the long-term, largely through acquisitions. The company acquired Byram Healthcare, a distributor of direct-to-patient medical supplies. This acquisition boosted Owens & Minor’s position in at-home healthcare. Byram added $118 million to Owens & Minor’s first-quarter revenue.

Owens & Minor also closed on its acquisition of the surgical and infection prevention business of Halyard Health in the first quarter. This deal expands Owens & Minor’s portfolio, to include new medical supplies like sterilization wraps, surgical drapes and gowns, facial protection, protective apparel, and medical exam gloves. These acquisitions expand Owens & Minor’s reach into high-growth categories, indicating that the turnaround is on track.

Source: April Investor Presentation, page 14

We believe Owens & Minor can achieve a long-term annual earnings growth rate of 8% to 10%. In the meantime, the stock is significantly undervalued, and also has a high dividend yield. Analysts expect Owens & Minor to generate earnings-per-share of $2.00 in 2018. As a result, the stock trades for a price-to-earnings ratio of just 8.1. We believe the stock deserves a price-to-earnings ratio of 14-15, equal to a fair value price of $29 for Owens & Minor.

Expansion of the price-to-earnings ratio could add 12% to annual returns for shareholders. Adding 8% earnings growth and a 6%+ dividend yield results in expected total returns of 26%+ for Owens & Minor stock.

Top Dividend Achiever No. 1: Buckeye Partners

• Expected Annual Returns: 27%-28%

The highest-ranked Dividend Achiever in the Sure Analysis research database is Buckeye Partners (BPL), a midstream MLP. Buckeye has approximately 6,000 miles of pipelines, and more than 135 liquid petroleum product terminals, with over 176 million barrels of total storage capacity. Approximately 95% of EBITDA is derived from fee-based sources.

Source: 2018 Investor Presentation, page 4

Buckeye’s portfolio of pipelines and terminals is located in the East Coast, Midwest, and Gulf Coast regions of the U.S. It also has a significant international presence, with a 50% interest in VTTI. In 2017, adjusted EBITDA and DCF rose 8.3% and 0.7%, respectively. However, performance deteriorated to start 2018. In the first quarter, adjusted EBITDA declined 5.7% year-over-year, while DCF fell 11%.

Fortunately, Buckeye can return to EBITDA growth, through new projects. For example, one of the most important projects for Buckeye is the Michigan/Ohio expansion project. The company has secured 10-year commitments from oil customers, totaling 50,500 barrels per day. Phase two of the project, expected to be completed by the end of 2018, is projected to add another 40,000 barrels per day of capacity.

Source: 2018 Investor Presentation, page 12

We expect Buckeye to generate a very high rate of return going forward, because the stock has an attractive combination of growth potential, undervaluation, and a high yield. We expect Buckeye will generate EBITDA-per-unit of $6.77 in 2018. Based on this, the MLP is currently trading at a price-to-EBITDA ratio of just 5.3. We believe fair value is a price-to-EBITDA ratio of 7-8, which would add 7% to Buckeye’s annual returns.

In addition, Buckeye has the potential for 6% EBITDA growth each year. When combined with its 14% distribution yield, Buckeye could generate total returns of 27%+ per year.