5 Best Stocks for Continued Dividend Growth

Don't just chase yield — chase potential

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5 Best Stocks for Continued Dividend Growth

Texas Instruments

TexasInstruments185 5 Best Stocks for Continued Dividend GrowthCurrent Yield: 2.9%
Payout Ratio: 61%
Dividend Growth: 1,310% since 2003

Texas Instruments (TXN) might not be the sexiest stock out there in a post-PC age, where mobile devices are all the rage. But this chipmaker still does very brisk business across a host of tech segments, and in fact has recently eclipsed its pre-recession highs; TXN stock is up more than 40% in the past 12 months.

And when it comes to dividends, Texas Instruments is also a bit counterintuitive — but a serious player worth a look. Consider that in 2003, TXN paid 2.125 cents a quarter, and now pays 30 cents a quarter for an increase of about 13-fold. Furthermore, while payouts are at 60% of current-year earnings, they’re only about half of FY 2014 earnings, meaning more increases are sure to come in the years ahead.

While semiconductor stocks are obviously at risk in some ways, it’s important to remember that on a basic level we need chips to run just about everything these days — and while the sexiest players in mobile semiconductors might be growth investments, there’s nothing wrong with picking a slower but entrenched player like TXN for the income.


Article printed from InvestorPlace Media, http://investorplace.com/2013/09/5-best-stocks-for-continued-dividend-growth/.

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