Stocks with dividend growth generally outperform their peers and generate increased profits year after year.
Thus, the dividend growth strategy has an edge over the steady dividend strategy. By investing in stocks with dividend growth, investors can enjoy rising current income while awaiting capital appreciation.
Dividend growth stocks also provide some margin of safety, which enables investors to withstand shocks.
In fact, stocks that have a strong history of dividend growth, as opposed to those that have high yields, form a healthy portfolio.
Moreover, these stocks often have superior fundamentals compared to other dividend paying stocks. This is because dividend growth is often an outcome of a sustainable business model, a long track record of profitability, rising cash flows, good liquidity, a strong balance sheet and some value characteristics.
Here is a selection of stocks that could result in a winning dividend growth portfolio:
AT&T -- Yield: 4.52%
AT&T (NYSE:T) employs 280,870 people, generates revenue of $146,801.00 million and has a net income of $13,687.00 million. The current market capitalization stands at $261.41 billion.AT&T’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $49,599.00 million. The EBITDA margin is 33.79% (the operating margin is 16.88% and the net profit margin 9.32%).
Financials: The total debt represents 31.33% of AT&T assets and the total debt in relation to the equity amounts to 102.84%. Due to the financial situation, a return on equity of 12.57% was realized by AT&T.
Twelve trailing months earnings per share reached a value of $2.25. Last fiscal year, AT&T paid $1.89 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 18.88, the P/S ratio is 1.78 and the P/B ratio is finally 2.13. The dividend yield amounts to 4.52%.
Stock Charts:
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| Long-Term Stock Price Chart of AT&T (T) |
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| Long-Term Dividend Payment History of AT&T (T) |
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| Long-Term Dividend Yield History of AT&T (T) |
Nu Skin Enterprises -- Yield: 2.79%
Nu Skin Enterprises (NYSE:NUS) employs 4,800 people, generates revenue of $2,247.05 million and has a net income of $133.05 million. The current market capitalization stands at $2.87 billion.Nu Skin Enterprises’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $316.07 million. The EBITDA margin is 14.07% (the operating margin is 10.89% and the net profit margin 5.92%).
Financials: The total debt represents 16.58% of Nu Skin Enterprises assets and the total debt in relation to the equity amounts to 30.23%. Due to the financial situation, a return on equity of 15.05% was realized by Nu Skin Enterprises.
Twelve trailing months earnings per share reached a value of $1.71. Last fiscal year, Nu Skin Enterprises paid $1.40 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 29.87, the P/S ratio is 1.27 and the P/B ratio is finally 3.64. The dividend yield amounts to 2.79%.
Stock Charts:
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| Long-Term Stock Price Chart of Nu Skin Enterprises (NUS) |
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| Long-Term Dividend Payment History of Nu Skin Enterprises (NUS) |
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| Long-Term Dividend Yield History of Nu Skin Enterprises (NUS) |
MB Financial -- Yield: 2.02%
MB Financial (NASDAQ:MBFI) employs 2,980 people, generates revenue of $494.23 million and has a net income of $158.95 million. The current market capitalization stands at $2.77 billion.MB Financial’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $317.32 million. The EBITDA margin is 40.28% (the operating margin is 29.47% and the net profit margin 20.18%).
Financials: The total debt represents 3.16% of MB Financial assets and the total debt in relation to the equity amounts to 23.59%. Due to the financial situation, a return on equity of 7.78% was realized by MB Financial.
Twelve trailing months earnings per share reached a value of $2.09. Last fiscal year, MB Financial paid $0.65 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 17.96, the P/S ratio is 3.51 and the P/B ratio is finally 1.40. The dividend yield amounts to 2.02%.
Stock Charts:
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| Long-Term Stock Price Chart of MB Financial (MBFI) |
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| Long-Term Dividend Payment History of MB Financial (MBFI) |
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| Long-Term Dividend Yield History of MB Financial (MBFI) |
Carlisle Companies -- Yield: 1.13%
Carlisle Companies (NYSE:CSL) employs 12,000 people, generates revenue of $3,543.20 million and has a net income of $319.60 million. The current market capitalization stands at $6.86 billion.Carlisle Companies’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $632.00 million. The EBITDA margin is 17.84% (the operating margin is 14.17% and the net profit margin 9.02%).
Financials: The total debt represents 18.87% of Carlisle Companies assets and the total debt in relation to the equity amounts to 31.75%. Due to the financial situation, a return on equity of 13.93% was realized by Carlisle Companies.
Twelve trailing months earnings per share reached a value of $5.27. Last fiscal year, Carlisle Companies paid $1.10 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 20.17, the P/S ratio is 1.93 and the P/B ratio is finally 2.91. The dividend yield amounts to 1.13%.
Stock Charts:
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| Long-Term Stock Price Chart of Carlisle Companies (CSL) |
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| Long-Term Dividend Payment History of Carlisle Companies (CSL) |
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| Long-Term Dividend Yield History of Carlisle Companies (CSL) |
NVIDIA Corporation -- Yield: 0.86%
NVIDIA Corporation (NASDAQ:NVDA) employs 9,227 people, generates revenue of $5,010.00 million and has a net income of $614.00 million. The current market capitalization stands at $28.79 billion.NVIDIA Corporation’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $1,097.00 million. The EBITDA margin is 21.90% (the operating margin is 14.91% and the net profit margin 12.26%).
Financials: The total debt represents 20.49% of NVIDIA Corporation assets and the total debt in relation to the equity amounts to 33.79%. Due to the financial situation, a return on equity of 13.82% was realized by NVIDIA Corporation.
Twelve trailing months earnings per share reached a value of $1.16. Last fiscal year, NVIDIA Corporation paid $0.40 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 45.69, the P/S ratio is 5.67 and the P/B ratio is finally 6.41. The dividend yield amounts to 0.86%.
Stock Charts:
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| Long-Term Stock Price Chart of NVIDIA Corporation (NVDA) |
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| Long-Term Dividend Payment History of NVIDIA Corporation (NVDA) |
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| Long-Term Dividend Yield History of NVIDIA Corporation (NVDA) |