What Are My Top Dividend Growth Stocks? Visa, Costco, Microsoft, Lowe’s, and Apple

TL;DR

The top five dividend growth stocks presented are Visa, Costco, Microsoft, Lowe’s, and Apple, with United Rentals as a bonus candidate. Visa’s latest dividend increase was 17.98%, while Lowe’s most recent hike was 32%; each company also has estimated earnings well above its current dividend payout. Read on to compare their dividend histories, payout coverage, and growth potential.

Transcript

what is going on investors hopefully guys are doing well out there today I'm going to reveal my top five dividend growth companies that I invest in plus a bonus company that I think will become an outstanding dividend Growth Company for many years to come this strategy is particularly attractive for long-term Buy and Hold investors like myself that... Read More

Key Insights

• 🤨 Visa has consistently raised its dividend and witnessed significant stock appreciation, making it a successful long-term investment.
• 💗 Costco stands out with its growing dividends, special dividends, shareholder-friendly practices, and profitability.
• 💪 Microsoft offers consistent dividend growth and substantial stock appreciation, with strong earnings projections.
• 🤨 Lowe's has a remarkable record of raising dividends, maintaining solid earnings, and projecting continued steady dividend growth.
• ✋ United Rentals has just started paying dividends, and with its high earnings estimate, it has the potential for sustained dividend increases.
• ❓ Other notable dividend growth companies include Starbucks, Nike, Johnson & Johnson, and Home Depot.

Questions & Answers

Q: What are the top five dividend growth stocks on the list?

The five selections are Visa, Costco, Microsoft, Lowe’s, and Apple. United Rentals is included as a bonus company that could begin a long stretch of dividend increases.

Q: Why is Visa considered a strong dividend growth stock?

Visa has consistently increased its dividend since 2008, and its latest increase was 17.98%. Its annual dividend is $1.80 per share, while expected 2023 earnings exceed $8 per share, which the speaker views as room for continued dividend growth.

Q: What makes Costco attractive to dividend growth investors?

Costco has consistently raised its dividend since 2004 and has periodically issued special dividends since 2012. It pays $3.60 per share annually and was expected to earn more than $14 per share, while its most recent cited special dividend was $10 per share in December 2020.

Q: How does Microsoft combine dividend growth with stock appreciation?

Microsoft has a long record of growing its dividend, and its shares appreciated by more than 800% over the preceding 10 years. With an annual dividend payout of $2.72 and expected earnings above $10 per share, the speaker believes its dividend can continue rising safely.

Q: How strong is Lowe’s dividend growth record?

Lowe’s has increased its dividend for more than three decades, often by over 20% per year. Its latest cited increase was 32%, and its $4.20 annual payout is supported by earnings estimates above $13 per share.

Q: Why is United Rentals a potential future dividend growth company?

United Rentals began paying a dividend for the first time in its history at $5.92 per share, and management indicated an intention to increase it. Estimated earnings above $40 per share give the company substantial room between earnings and its dividend payout.

Q: Does Apple have room to increase its dividend?

Apple’s two most recent dividend increases were only between 5% and 7%, although the company was also aggressively buying back shares. It pays $0.91 per share in dividends while earning more than $6 per share, leaving room for future increases.

Q: Why does the speaker favor dividend growth investing?

The strategy is aimed at long-term buy-and-hold investors who reinvest their dividends. Reinvesting and compounding growing payments over a long period is the central appeal described in the transcript.

Summary & Key Takeaways

• Visa has consistently raised its dividend payout and has seen significant stock appreciation, making it an attractive choice for long-term investors.

• Costco offers growing dividends, special dividends, and strong profitability, making it a shareholder-friendly retail stock.

• Microsoft provides consistent dividend growth and substantial stock appreciation, with earnings to support future dividend increases.

• Lowe's has a history of raising dividends significantly, with solid earnings estimates to maintain dividend growth.

• United Rentals is a company with the potential for long-term dividend increases as it recently started paying dividends and has strong earnings.