Searching for High Dividend Growth Stocks

How people buy dividend stocks is dependent on each individual investor. Some are building out diversification, maxing out income, or looking for a lower yield but high growth. Today’s post will focus on the last item; lower yield with high growth.

To start this exercise I ran a stock screen with the following criteria to identify large companies with a history of raising dividends, retaining significant capital to reinvest back into the company while keeping a low debt load in case of rising interest rates:

  • Dividend Growth Rate – a minimum 7% growth rate over 1,3,5, & 10 year periods
  • Consecutive Years of Dividend Growth – a minimum of 10 years
  • Market Cap – $10B or greater
  • Payout Ratio – 45% or less
  • Debt to Capital Ratio – 75% or less

This screen resulted in 28 stocks with an average dividend yield of 1.41% and an average 10 year dividend growth rate of 17.11%.

SymbolCompanyPriceDiv Yield
ACNAccenture plc396.360.98%
AFLAflac Incorporated56.842.81%
ALLThe Allstate Corporation114.142.84%
AOSA. O. Smith Corporation80.911.38%
APHAmphenol Corporation82.480.97%
ATVIActivision Blizzard, Inc.61.360.77%
AVGOBroadcom Inc.634.962.58%
AVYAvery Dennison Corporation206.891.31%
BBYBest Buy Co., Inc.100.072.80%
BROBrown & Brown, Inc.65.870.62%
COSTCostco Wholesale Corporation547.610.58%
CTASCintas Corporation438.510.87%
EXPDExpeditors International of Washington, Inc.129.930.89%
GGGGraco Inc.76.361.10%
HIGThe Hartford Financial Services Group, Inc.67.72.27%
JKHYJack Henry & Associates, Inc.164.241.12%
KLACKLA Corporation391.551.07%
MCOMoody’s Corporation393.640.63%
MKTXMarketAxess Holdings Inc.410.420.64%
MSFTMicrosoft Corporation323.80.77%
NOCNorthrop Grumman Corporation377.461.66%
POOLPool Corporation540.640.59%
RHIRobert Half International Inc.106.511.43%
SCIService Corporation International67.871.36%
SNASnap-on Incorporated209.352.71%
TROWT. Rowe Price Group, Inc.193.362.23%
TSCOTractor Supply Company226.650.92%
WSMWilliams-Sonoma, Inc.169.431.68%

The 5 year average dividend and 52 week high was added to help identify which stocks are yielding above their average and which stocks are coming off their high and into correction territory.

SymbolCompanyPriceDiv Yield5Y Avg YieldYield Above 5Y Avg52 Week High% below 52 Week High
ACNAccenture plc396.360.98%1.50%413.654.18%
AFLAflac Incorporated56.842.81%2.35%Y58.522.87%
ALLThe Allstate Corporation114.142.84%1.91%Y14018.47%
AOSA. O. Smith Corporation80.911.38%1.45%84.784.56%
APHAmphenol Corporation82.480.97%0.92%Y86.054.15%
ATVIActivision Blizzard, Inc.61.360.77%0.57%Y104.5341.30%
AVGOBroadcom Inc.634.962.58%2.88%644.751.52%
AVYAvery Dennison Corporation206.891.31%1.77%229.249.75%
BBYBest Buy Co., Inc.100.072.80%2.33%Y141.9729.51%
BROBrown & Brown, Inc.65.870.62%0.96%68.533.88%
COSTCostco Wholesale Corporation547.610.58%0.94%566.553.34%
CTASCintas Corporation438.510.87%1.24%461.444.97%
EXPDExpeditors International of Washington, Inc.129.930.89%1.23%137.85.71%
GGGGraco Inc.76.361.10%1.19%80.985.71%
HIGThe Hartford Financial Services Group, Inc.67.72.27%2.25%Y78.1713.39%
JKHYJack Henry & Associates, Inc.164.241.12%1.07%Y179.988.75%
KLACKLA Corporation391.551.07%2.04%428.228.56%
MCOMoody’s Corporation393.640.63%0.93%407.943.51%
MKTXMarketAxess Holdings Inc.410.420.64%0.59%Y601.4231.76%
MSFTMicrosoft Corporation323.80.77%1.41%349.677.40%
NOCNorthrop Grumman Corporation377.461.66%1.56%Y408.037.49%
POOLPool Corporation540.640.59%0.91%582.277.15%
RHIRobert Half International Inc.106.511.43%2.02%120.8311.85%
SCIService Corporation International67.871.36%1.68%70.033.09%
SNASnap-on Incorporated209.352.71%2.23%Y259.9919.48%
TROWT. Rowe Price Group, Inc.193.362.23%2.52%224.5613.89%
TSCOTractor Supply Company226.650.92%1.31%238.284.88%
WSMWilliams-Sonoma, Inc.169.431.68%2.43%223.3224.13%

Filtering down to stocks trading near 20% or more off their 52 week high and yield above their 5 year average narrows this list down to five potential stocks:

SymbolCompanyPriceDiv Yield5Y Avg YieldYield Above 5Y Avg52 Week High% below 52 Week High
ALLThe Allstate Corporation114.142.84%1.91%Y14018.47%
ATVIActivision Blizzard, Inc.61.360.77%0.57%Y104.5341.30%
BBYBest Buy Co., Inc.100.072.80%2.33%Y141.9729.51%
MKTXMarketAxess Holdings Inc.410.420.64%0.59%Y601.4231.76%
SNASnap-on Incorporated209.352.71%2.23%Y259.9919.48%

This screening is based on historical data so each stock will need to be investigated further. For example: Activision Blizzard is being punished by investors over internal rifts between management and software programmers over allegations of sexual harassment and discrimination. I would need to see their latest quarterly report to see how this is impacting financials and what the company’s outlook is going forward and if their products are getting stale (COD 4 is still my favorite installment).

Buys and Sells for the Week 12/17

The fed made it clear their plan for 2022 and markets soared for the week. Not much cash left but I plan on putting every dividend dollar I receive to work to close out the year. Here are my trades for the week:

  1. Oil-Dri Corporation of America (ODC) – increased position – Not sure why share price dropped but I’ll take it. Grabbed 14 shares @ $30.70 and a 3.52% yield.
  2. Leggett and Platt (LEG) – increased position – Slowly building this position out with small buys. Grabbed 4 shares @ $40.35 and a 4.15% yield.

Buys and Sells for the Week 12/10

Received five dividend raises this week; 3.03% raise from Enbridge (ENB), 13.89% raise from Broadcom (AVGO), 14.03% raise from Waste Management (WM), 0.29% raise from W.P. Carey (WPC), and a 2.56% raise from Pfizer (PFE). Most of my free cash was spent during last week’s dip so trading was light as I used up the last of my cash balance. Here are my trades for the week:

  1. Allstate (ALL) – new position – More than 23% off its 52 week high, 11 consecutive years of dividend growth and a 10 year dividend growth rate of 12.66%. Grabbed 4 shares @ $107.49 and a 3.01% yield..
  2. Packaging Corp of America (PKG) – new position – More than 17% off its 52 week high, 11 consecutive years of dividend growth and a 10 year dividend growth rate of 18.41%. Grabbed 4 shares @ $129.13 and a 3.10% yield.

November Dividend Income

After 34 years of clocking in and out of work and religiously saving at least 10% annually in my 401K every year, my countdown to financial independence is in sight. Each month is a step closer and let’s take a look at how this past month is getting me there.

For the month of November I made $3,235.39; an increase of 39.76% versus this time last year. As a note some dividend growth can be deceiving and that is what I have. For November I had two large payouts from CM & BGS that normally fall in the October time so my number was inflated.  Discounting these two payouts my YoY growth would be 16.6% which is well above my 12.5% target.

In November I received 4 dividend raise announcements from Telus (TU), Pinnacle West Capital (PNW), Bank of Nova Scotia (BNS), and Merck (MRK). I also received my first dividend cut for the year from Compass Mineral as they decided to redirect cash flow from dividends to R&D and Capex for their lithium discovery.

On the home front my oldest daughter moved from our auto insurance policy and onto her own plan. This reduced my expenses which allowed me to increase my 401K savings rate by 1% and I increased my weekly M1 finance contribution by $10.  All this resulted in my savings rate growing from 24.9% to 26.2%.

Let’s see the things we all love to see…charts and dividend payouts:

DateSymbolCompanyAmount
11/1/21BGSB&G FOODS INC$264.82
11/1/21CMCANADIAN IMP BK COMM$271.20
11/1/21GISGENERAL MILLS INC$94.11
11/1/21TAT&T INC$624.04
11/1/21VZVERIZON COMMUNICATIONS INC$97.67
11/4/21BLVVANGUARD BD INDEX FDS LONG TERM BOND$14.47
11/4/21VCLTVANGUARD SCOTTSDALE FUNDS LONG-TERM COR$15.35
11/5/21HYGISHARES TR IBOXX HI YD ETF$17.31
11/5/21PFFISHARES TR PFD AND INCM SEC$47.76
11/8/21APDAIR PRODUCTS AND CHEMICALS INC$34.00
11/15/21ABBVABBVIE INC$196.18
11/15/21EPREPR PROPERTIES$77.71
11/15/21HASHASBRO INC$38.70
11/15/21IBCPINDEPENDENT BK CORP MICH$41.30
11/15/21OHIOMEGA HEALTHCARE INVESTORS INC$722.72
11/15/21PGPROCTER AND GAMBLE CO$113.48
11/18/21PSECPROSPECT CAP CORP$155.54
11/19/21ARTNAARTESIAN RES CORP$201.09
11/23/21FASTFASTENAL$11.47
11/26/21ODCOIL DRI CORP OF AMERICA$22.09
11/26/21WSMWILLIAMS-SONOMA INC$12.87
11/30/21NUSIETF SER SOLUTIONS NATIONWIDE RSK$13.31
11/30/21SBRASABRA HEALTH CARE REIT INC$86.36
11/30/21M1 FinanceM1 DIVIDEND GROWTH ACCOUNT$61.84

Weekly Buys and Sells for the Week 12/3

Received four dividend raises this week; 6.15% raise from Merck (MRK), 11.1% raise in C$ from Bank of Nova Scotia (BNS), 10.3% raise in C$ from Canadian Imperial Bank of Commerce (CM), and a 10.2% raise from Amgen (AMGN). Markets picked up where they left off on Black Friday continuing to drop when the Fed hinted at accelerating the tapering process by a few months which made quite a few buying opportunities. Here are my trades for the week:

  1. Leggett and Platt (LEG) – increased position – Slowly building this position out with small buys. Grabbed 2 shares @ $40.64 and a 4.13% yield..
  2. Walgreens Boots Alliance (WBA) – increased position – WBA is increasing their focus on health care and I am onboard. Grabbed 2 shares @ $45.66 and a 4.20% yield.
  3. Snap-On Inc. (SNA) – increased position – Keep lowering my cost per share with this strong dividend growth stock. Grabbed 3 shares @ $207.81 and a 2.73% yield.
  4. Verizon Inc. (VZ) – increased position – This buy should push me into a triple digit quarterly payout for 2022. Grabbed 3 share @ $51.46 and a 4.97% yield.
  5. Amgen (AMGN) – increased position – Priced dropped yet again and got this a $1/share cheaper than what I paid for in October. Grabbed 1 share @ $200.59 and a 3.51% yield.
  6. Unilever PLC (UL) – increased position – Trading at their 52 week low. Grabbed 2 shares @ $51.11 and a 3.91% yield.
  7. J.M. Smucker (SJM) – increased position – Started this position earlier in the year and still working on building it up. Grabbed 1 share @ $126.23 and a 3.14% yield.
  8. Oil-Dri Corporation of America (ODC) – increased position – ODC is finally raising their prices for kitty litter. Grabbed 2 shares @ $32.72 and a 3.29% yield.