34 Dividend Growth Stocks To Consider When Everthing Is Expensive On The Market

With the S&P 500 once again in negative territory for the year, companies of all sizes have seen their share prices decline.

When a stock that pays a strong dividend goes down, it has the happy effect of pushing its dividend yield even higher, which can create a nice buying opportunity for long-term investors who want to add income to their portfolio.

Attached I've compiled a list of great dividend growth stocks that might look attractive despite the market has reached a hot valuation level.

Each of the results have predicted earnings multiples of less than 15 on double-digit earnings growth rates, a debt-to-equity ratio under 1, and a Beta less than the overall market as well.

Exactly 34 companies match my criteria. Attached you can find the full results. The first table shows all Dividend Champs and Contenders. Those stocks have raised dividends over a period of more than 10 consecutive years. 

The second table shows the results from the Dividend Challengers List. Each of the results matched the above mentioned criteria and has grown dividends over 5 to 10 years.

Here are the tables:

13 High-Yield Large Caps From The S&P 500 Stock Index

Despite all the hand-wringing over the beginning of the Federal Reserve interest rate increases, the fact of the matter is they will start small, stay small and happen at a very slow pace. 

In fact, most Wall Street strategists predict that by the end of 2017, the fed funds rate will only be 2% at the very most. It could be even lower if economic growth slows down between now and then. 

With that scenario very likely, solid stocks with a big yield will remain in demand. I screened the S&P 500 index for large cap, blue chip stocks that paid a 5% dividend. 

As of now, 13 stocks pay such a high yield of which 5 have also a low forward P/E and 8 a buy or better rating.

A major worry for many yield-hungry investors is that when the Federal Reserve begins raising the federal funds rate, market prices for any yield-producing investment can come under pressure. 

When interest rates rise, the value of an existing bond or preferred stock must adjust itself lower so it has the same yield as a similarly rated new security.

A good advice from me is to avoid stocks with high debt leverage like REITs. Those stocks are living from an interest margin that could be destroyed.

Here are the large cap high-yields from the S&P 500...

These 14 Promising Income Stocks Should Grow Earnings Over 10% Yearly

Investors often pick between growth and income. Why limit yourself? I sit here and watch my market screener, trying to find the next stock that could deliver me a good return. 

I'm a strong believer in growth and hope that dividends could bring me some risk compensation. Today I've created a forward orientated screen for U.S. domiciled stocks.

These are my criteria:

- Market Cap over 2 billion
- Positive Dividend Yield
- EPS growth forecasts over 10% yearly for the next half decade
- P/E less than 15
- Sales growth over 5% in the past 5 years
- Operating Margin over 15%
- Debt to Equity under 1

14 stocks fulfilled exactly these criteria for the moment. There are some pretty known companies on the screen. 

All stocks discussed in this article all pay dividends and have double-digit growth rates. Some of these companies are industry-dominating forces, stocks that you have undoubtedly heard of, while others are lesser known.

Here are the top yielding results...

8 Fast Growing Dividend Champions With Real Values And Low Valuation Ratios

As many dividend-growth investors know, investing in dividend-paying companies is a lot more than simply picking stocks from the Dividend Champion list.

The true power of dividend investing lies within the compounding effect of dividend growth over the years. Finding the "growth" factor in such companies is the hard part.

Some investors are blinded by the past growth while others ignore several metrics to the profit of higher yielding companies. It's more than hard to work to discover the real values in a company.

Growth is more important than yield. A true fact but often, a fast growing company fails to gain momentum growth. Each bigger company suffers to speed up growth. As a result, the high valuation will also come down. This is in general not bad. I use this opportunity to buy stocks if the outlook is still bright.

Attached you can find a few dividend champions that offer both, growth and value for you. I've selected those 30 stocks that have grown dividends over the past 10 years at the fastest pace. Only eight of them have a P/E under 15. Attached you can find lists, the low P/E and 20 highest yielding fastest 30.

Here are the top results...

8 Cheap Dividend Growth Stocks With Yields Over 4% And Decent Growth Potential

It’s true that rising bond yields provide more competition for stocks when it comes to luring income investors, and that income stocks tend to lose the most relative appeal.

It’s also true that the Federal Reserve has hinted it could raise its Fed funds rate soon, perhaps by year’s end.

The rate has been targeted at a historic low of 0% to 0.25% since late 2008, and recently hovered around an effective rate of 0.12%. What’s not clear is that a rise in the Fed funds rate would push yields on bonds substantially higher.

Don’t shy away from stocks with high dividend yields because of a looming interest rate hike. Do, however, favor companies with decent growth potential to complement their cash payouts. Below are three that yield over 4%.

Here are the results...