17 Dividend Aristocrats With Double-Digit EPS Growth Predictions Over 5 Years

Last month we looked at the Canadian dividend aristocrats, a list of companies that have increased dividends each year for the past five years.

The list of stocks is a good starting point for dividend investors, but it also reveals a number of flaws when looking to invest in a company.

Some companies grow their dividend by a small amount in order to remain on the list, while others ignore poor earnings and continue to distribute more in dividends then they earn.

Dividend growth stocks make an excellent choice for investors seeking both income and growth. Dividend growth stocks raise their dividend year after year, growing their owner’s income streams.

Who doesn’t want a rising standard of living year after year? Not only do dividend growth stocks have practical appeal, they have also historically outperformed non-dividend paying stocks by about 7.8 percentage points per year from 1972 through 2013. Not a bad excess return, for simply buying stocks that raise their dividends year after year.

That’s why it’s important to include additional criteria in your search for the best dividend stocks. One thing to look for is the 5-year average dividend growth rate, which shows how consistently a company raises its dividend over time.

Today I ran a stock screen that looked for companies that should increase earnings per share by 10 percent or more for the next five years. The results showed seventeen companies that should produce five years of double digit eps growth and possible double digit dividend growth. Here’s what we found:

17 Dividend Aristocrats With Double-Digit EPS Growth
Predictions Over 5 Years
(click to enlarge)

20 Highest Yielding Stocks From The S&P MidCap 400 Dividend Aristocrats Index

Most investors know the fantastic lists of long term dividend growers, named as Dividend Aristocrats, Champions, Contenders, Challengers or even Achievers. 

On the lists are many large caps but smaller capitalized stocks don't jump into your mind if you think at these lists. Today I like to show you some of the highest yielding MidCap Dividend Aristocrats. 

Smaller stocks have the advantage to grow faster than large cap holdings. They have a normally a more tighten management structure and could act more dynamic. 

 Here are the 20 highest yielding stocks from the S&P MidCap 400 Dividend Aristocrats sorted by dividend yield from highest to lowest. Each stock has increased its annual dividend 15 or more consecutive years.

20 Highest Yielding Stocks From
The S&P MidCap 400 Dividend Aristocrats Index
(click to enlarge)

9 Attractively Priced, High Quality Dividend Growth Stocks To Consider Now

If you are looking for an attractive investment with income for your portfolio, you should look for cheaply valuated dividend growth stocks with potential to grow in the near term.

What Do I Mean by an Attractively Priced, High Quality DGI Stock?

To preface my choices, I define high quality DGI stocks as those having:

• Solid financial strength - I require an S&P credit rating of at least BBB or better and a debt-to-total capital ratio of less than 50%.
• A consistent track record of growing dividends - I prefer 10 years of dividend growth, but I will consider relatively new DGI stocks with shorter records. In addition, I look for an historical 5-year dividend compound annual growth rate (i.e., CAGR) of at least 4%.
• The ability to continue to grow the dividend in the future - I look for a forecast 3-year dividend CAGR of at least 4% and a dividend payout ratio of less than 80%.

In terms of value, I look for the following:

• Is the stock trading at or below its historical 10-year P/E?
• Is the stock's dividend yield at or near its 5-year high?
• Is the stock trading at or below Morningstar's fair value estimate? S&P's fair value estimate? Valuentum's fair value estimate?
• Is the stock trading below S&P's 12-month target?

There are nine top results that came into my minds. For sure I've not included long-term dividend growth as essential criteria. That's the reason why you might find Apple and Gilead in the results.

These are the results from the screen...

7 Cheap Dividend Aristocrats With Solid Yields And Growth Perspectives

When you’re looking for dividend stocks to get behind, you want to make sure to go with a combination of current yield as well as the potential for dividend growth over the years. 

Not every high-yielding stock on the market today started as a big payer — in fact, most didn’t.

I screened the market by the cheapest Dividend Aristocrats with solid earnings growth for the next five years. Seven stocks jumped into my screen.

These are my criteria in detail:

- Dividend Aristocrat
- EPS growth forecast for the next five years over 5%
- Forward P/E under 15

With that in mind, here are seven can’t-miss dividend stocks to buy today:

5 Large Cap Dividend Champions With Potential

One of the best ways to boost your dividend income is to invest in blue chip stocks. Blue chip stocks are large, well-established market leaders, and financially sound.

They also tend to be stocks with dividends that lesser companies simply can't match. To start your search, here are five top dividend stocks, each a blue chip in its own right.

Below are five top stock picks for investors with income need and safety ambitious. I hope you can find a few new ideas in them.

Here are the picks...