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).

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