Investing in dividend growth stocks is a reliable strategy for preserving and growing capital in the stock market. These companies have proven track records of increasing shareholder payouts, showcasing financial strength, competent management, and a competitive edge in their industries. They offer a mix of steady income and potential for capital appreciation.
Not all dividend growers are the same. Some companies stand out with exceptional dividend-growth rates and promising financial outlooks. These elite performers present compelling opportunities for investors looking to maximize returns through dividend growth investing.
Two standout dividend growth stocks are FedEx (NYSE: FDX) and Johnson & Johnson (NYSE: JNJ).
FedEx is a leader in the logistics industry, boasting a staggering dividend growth rate of 15.5% per year over the last five years. With a modest payout ratio of around 29%, FedEx is well-positioned to maintain its dividend growth in the future. The stock is attractively priced and offers a yield of 2.15%.
Johnson & Johnson stands out in the healthcare sector with its diversified portfolio of pharmaceuticals and medical devices. The company has a 62-year track record of consecutive dividend increases and an average annual growth rate of 5.62% over the past five years. With a conservative payout ratio of around 70% and a top-tier balance sheet, J&J is a safe bet for income investors.
Both FedEx and Johnson & Johnson offer dependable dividend growth, strong business structures, and solid financial positions. Consider these stocks for long-term investment opportunities.