Five Solid Dividend Growth Stocks To Counter Choppy Markets

No doubt, dividends are always the major sources of consistent income for investors when returns from price movements of stocks are at risk. In particular, stocks that have a strong history of dividend growth as opposed to those that pays high yields form a healthy portfolio with more scope for capital appreciation.

Why Dividend Growth?

Stocks that have a history of enhancing shareholder returns generally act as a hedge against economic uncertainty or stock market volatility.

Additionally, these stocks have superior fundamentals compared to other dividend paying stocks as dividend growth poses a sustainable business model, a long track of profitability, rising cash flows, good liquidity, a strong balance sheet and some value characteristics. All these make dividend growth a promising investment amid market turbulence.

Further, these are proven outperformers over the long term despite the fact that they do not necessarily have the highest yields.

Hence, to find stocks with a solid dividend growth history, we have focused on 5-Year Historical Dividend Growth of more than zero. The combination of this metric with other exciting parameters could result in a winning portfolio:

Other Parameters:

Most Recent Payout Ratio less than M-Industry: This is the measure of dividend payments as a percentage of earnings. A relatively low payout ratio indicates the company’s ability to increase dividend in the future even in tough times.  

5-Year Historical Sales Growth greater than zero: This selects stocks with a strong record of revenue growth.

5-Year Historical EPS Growth greater than zero: This shortlists stocks with a solid earnings growth history.

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