Dividend growth investors have different approaches to stock picking, but I think there are some important factors that every investor looks at. As far as I am concerned, I think a good dividend growth pick has to show some simple characteristics.
The first is a stable and solid business with low volatility in top line and margins. The second factor is a low payout ratio and a commitment to increase dividends, typically shown by at least 5-10 consecutive years of dividend raises.
The third factor is a competitive advantage that should guarantee future stability for the company’s business. It’s obvious that an analysis based on these simple factors must be completed by an accurate analysis of the company’s financial condition and every position should be started only if valuation gives the prospects of decent returns.
On the basis of these initial factors, I am going to list and briefly discuss four dividend growth stocks in consumer-related industries that I think are worthy of consideration. All these companies have a stable business, a healthy balance sheet, some competitive advantages that help their business and trade at good or acceptable valuations.
Dividend Income orientated Blog. Ideas and Thoughts about Stocks, Dividends and Growth Opportunities.
