My first dividend growth stock pick for July 2021 is Bristol-Myers Squibb Co. - stock ticker BMY. With a market cap of $149 billion, this is a major pharma business. They've got one of the top drugs in the world - Revlimid. Growth has been pretty solid, too. Revenue has grown at a compound annual growth rate of 8% over the last decade, while EPS has a CAGR of almost 13% over the last 10 years. Bristol-Myers Squibb has increased its dividend for 12 consecutive years, with their most recent dividend increase coming in at almost 9%. And the dividend is protected by a low payout ratio of 26.3%, based on midpoint FY 2021 non-GAAP EPS guidance. Plus, the stock yields a market-beating 2.9%.

My second dividend growth stock pick for July 2021 is Enbridge Inc. - stock ticker ENB. You usually have to pick between a high yield and a high growth rate. Enbridge is the rare business that has typically given its investors both. The stock yields a market-smashing 6.8%. Even without much growth, that yield is awesome. However, Enbridge has increased its dividend for 25 consecutive years, with a 10-year DGR of 11.3%. This is a high yield high dividend growth. You'll rarely find this combination of yield and growth. And the payout ratio of 68.9% indicates no trouble with the dividend.

My third dividend growth stock pick for July 2021 is Huntington Bancshares Incorporated - stock ticker HBAN. This is a pretty small business compared to my other picks. The market cap is only $21 billion. But that just means there's room to grow. And grown it has. They've compounded revenue at an annual rate of 7% over the last decade. Now, EPS has a CAGR of less than 2% over that same time frame. But that's only because of the pandemic and the loan loss reserves nicking FY 2020's results. Profit is springing back big time this year. The regional bank has increased its dividend for 10 consecutive years, with a five-year DGR of 20.1%. That's incredible. And I think there's much more to come - the payout ratio is only 52.6%, giving them plenty of dividend growth firepower. Meanwhile, the stock yields 4.2%. That yield beats out almost every other regional bank stock I know of.

My fourth dividend growth stock pick for July 2021 is Lockheed Martin Corporation - stock ticker LMT. With a market cap of $106 billion, this is the 800-pound gorilla in the room. It's prime defense contractor. That majestic position has led to big growth. Revenue has compounded at almost 4%/year over the last decade. EPS sports a CAGR of 13.4% over the last 10 years. Lockheed Martin has increased its dividend for 18 consecutive years. The 10-year DGR is 14% - pretty much right in line with EPS growth. And with a payout ratio of 42%, there's plenty more room for future dividend raises. Plus, the stock yields a market-beating 2.7%. This stock could move up in a hurry.

My fifth dividend growth stock pick for July 2021 is Pinnacle West Capital Corporation - stock ticker PNW. I thought this stock looked good at the start of 2021. But with some mild underperformance YTD, it looks. Almost every basic valuation metric, including the P/E ratio of 16.8, indicates undervaluation relative both to the stock itself and the market as a whole. Keep in mind, the stock's own five-year average P/E ratio is 18.7, and this was a $100 stock before the pandemic. We'll have a full analysis and valuation video coming out soon on Pinnacle West. Suffice it to say, this is an attractive utility business operating in an attractive area trading for an attractive valuation.

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