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For dividend growth investors, much favor is given to those large-cap stocks with incredibly long dividend growth streaks, such as the Dividend Aristocrats index. However, investors looking for stronger returns could widen their search to include stocks with slightly shorter histories of dividend growth.

This article will look at three smaller Dividend Achievers, those companies with at least 10 years of dividend growth, that we feel could generate high total annual returns over the next five years.

These stocks not only have solid dividends and dividend growth, but they also have appealing valuations and attractive growth prospects.

Dividend Achiever #1: Comcast Corporation (CMCSA)

Comcast is a media, entertainment, and communications company. As of Q1 2023, Comcast began reporting in 2 key business segments: Connectivity & Platforms (Residential Connectivity & Platforms and Business Services Connectivity), and Content & Experiences (Media, Studios, Theme Parks).

Comcast reported its Q4 2023 results on 01/25/24. For the quarter, the company’s revenues climbed 2.3% to $31.3 billion, adjusted EBITDA was essentially flat, rising 0.1% to $8.0 billion, adjusted earnings-per-share climbed 2.4% to $0.84. And it generated free cash flow of $1.7 billion. The Connectivity & Platforms segment’s revenues rose by 0.5% to $20.4 billion and adjusted EBITDA growth was 3.1% to $7.6 billion with the help of adjusted EBITDA margin expansion of 1.3% to 37.1%.

For the full year, revenue was essentially flat, rising 0.1% to $121.6 billion, adjusted EBITDA rose 3.2% to $37.6 billion, FCF rose 2.5% to $13 billion, while adjusted EPS rose 9.3% to $3.98.

The company’s strong margins and free cash flow allow it to return significant cash to shareholders. During Q4 2023, Comcast repurchased $3.5 billion worth of common stock at ~$42.74 per share. In 2023, Comcast bought back $11 billion worth of shares at ~$41.92 per share.

Comcast has had 16 consecutive years of dividend increases. This fast dividend growth was made possible through solid earnings growth and with a safe dividend payout ratio. Its dividend is well-covered by earnings and cash flows. Comcast is one of the largest players in the entertainment industry.

Dividend Achiever #2: JP Morgan Chase (JPM)

JPMorgan was founded in 1799 as one of the first commercial banks in the U.S. Since then, it has merged or acquired more than 1,200 different institutions, creating a global banking behemoth with a $400+ billion market capitalization and about $160 billion in annual revenue. JPMorgan competes in every major segment of financial services, including consumer banking, commercial banking, home lending, credit cards, asset management, and investment banking.

JPMorgan posted fourth-quarter and full-year earnings on January 12th, 2024. For 2023 the bank set a record for full-year net income at $46 billion. Revenue was $38.6 billion, up almost 12% year-over-year. Adjusted earnings-per-share came to $3.97, which was down from $4.33 in Q3, but higher than the year-ago period, which was $3.57. The adjusted figure excludes a 74-cent charge for FDIC special assessment costs. Provisions for credit losses were $2.76 billion, double the $1.38 billion in Q3, and sharply higher than the $2.29 billion from a year ago.

Net interest income came to $24.05 billion, up from $20.2 billion a year ago and $22.7 billion in Q3. Noninterest expense was $24.5 billion, up from $21.8 billion in Q3, and the year-ago period at just $19 billion. Total loans were $1.32 trillion at the end of the year, flat to Q3. Deposits were $2.4 trillion, up fractionally from Q3.

JP Morgan has increased its dividend for 13 consecutive years including a recent ~9% increase to the quarterly dividend. With a dividend payout ratio under 40% expected for 2024, the dividend is highly secure thanks to the company’s strong profits.

Dividend Achiever #3: UnitedHealth Group (UNH)

UnitedHealth Group is a healthcare company that offers global healthcare services to tens of millions of people via a wide array of products. The company has two major reporting segments: UnitedHealth and Optum. The former provides global healthcare benefits to individuals, employers, and Medicare/Medicaid beneficiaries. The Optum segment is a services business that seeks to lower healthcare costs and optimize outcomes for its customers.

UnitedHealth’s market capitalization is over $400 billion, and it produces about $400 billion in revenue annually. UnitedHealth posted fourth-quarter and full-year earnings on January 12th, 2024, and results were better than expected on both the top and bottom lines. Adjusted earnings-per-share came to $6.16 for the quarter, 17 cents better than expected. Revenue increased 14% year-over-year to $94.4 billion, beating estimates by $2.22 billion.

UnitedHealthcare posted 12% growth for the quarter, coming in at $70.8 billion in revenue. The membership base actually declined slightly from the third quarter to 52.75 million. This was due to a decline of about 0.3 million members in its Medicaid business from ongoing eligibility reviews. The Optum business saw revenue soar 24% higher for the full year as it continues to be the primary driver of growth.

We forecast forward earnings-per-share growth of 12% annually as UnitedHealth continues to boost margins and generate revenue growth. UnitedHealth’s dividend is very safe today. At only 27% of earnings, UnitedHealth has tremendous flexibility in terms of returning capital to shareholders. UNH has increased its dividend for 14 consecutive years and currently yields 1.5%.

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