Two dividend growth stocks are great options for investors looking for capital appreciation. Dividend growth stocks are known for their ability to compound wealth over time by consistently increasing cash payouts to shareholders. This rising income stream can be reinvested, leading to even greater returns through compounding. The best dividend growth stocks not only raise payouts but also have consistent earnings growth that drives up stock prices.
One such stock is Abbott Laboratories (ABT). Abbott is a global healthcare company with a diverse portfolio of medical devices, diagnostic products, pharmaceuticals, and nutritional products. Despite a slight decrease in its stock price this year, Abbott has a strong track record of raising its dividend for 52 consecutive years. With a current dividend yield of 2% and an impressive 8.5% annualized dividend growth rate over the past five years, Abbott is a solid choice for investors seeking a reliable dividend growth stock.
Another top pick is Target (TGT). As one of the largest general merchandise retailers in the U.S., Target has been steadily growing its dividend for over five decades. With a dividend yield of 3% and a five-year annualized dividend growth rate of 10.1%, Target offers investors a compelling value proposition. Analysts expect Target to continue growing its earnings and revenue in the coming years, making it a promising option for investors looking for both income and growth.
In conclusion, Abbott Laboratories and Target are strong dividend growth stocks that offer the potential for long-lasting wealth accumulation through a combination of rising income and capital appreciation. These stocks are worth considering for any portfolio looking to build wealth over the long term.