7 Dividend Growth Stocks on Sale Today

These dividend stocks meet my strict investment criteria

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My goal is to purchase quality companies that grow earnings and dividends at an attractive price. Most members of the dividend champions list exhibit characteristics of a quality company.

After all, only a company with a strong business can afford to consistently grow earnings and dividends every single year for a quarter of a century.

To come up with the companies below, I started with a custom made list of the dividend champions I keep at Yahoo Finance. Being a dividend champion fulfills the quality criterion.

I then sorted the list by P/E ratio, and picked the companies with a P/E below 20. I have a maximum P/E requirement in order to avoid overpaying for companies. Even the best company in the world is not worth overpaying for.

The next step in the process included evaluating trends in earnings per share and dividends per share.

As I mentioned above, I want companies that can grow earnings per share over time. This will drive future increases in dividends, and protect the purchasing power of my income in retirement.

I do not want companies that increase dividends merely by increasing their payout ratios, or who have slowed down on dividend increases because their earnings are stagnant.

Here is a list of the companies I’ve come up with through my criteria screen:

VF Corp (VFC) engages in the design, production, procurement, marketing, and distribution of branded lifestyle apparel, footwear, and related products in the United States and Europe. The company has managed to increase dividends for 44 years in a row. Over the past decade, V.F. Corporation has managed to boost its dividend at a rate of 12.20% per year. Earnings per share rose from $1.18 to $2.85 over the past decade. The company is expected to earn $3.12 per share over the next year.

Currently, VF stock is attractively valued at 15.90 times forward earnings and yields 3.40%. The company has been on my watchlist for a few months.

Target Corporation (TGT) operates as a general merchandise retailer. The company has managed to increase dividends for 49 years in a row. Over the past decade, Target Corporation has managed to boost its dividend at a rate of 18.10% per year. Earnings per share rose from $3.21 to $5.25 over the past decade. The company is expected to earn $5.06 per share over the next year.

Currently, TGT stock is attractively valued at 12.60 times forward earnings and yields 3.80%. Check my analysis of Target for more information.

AFLAC Incorporated (AFL), through its subsidiary, American Family Life Assurance Company of Columbus, provides supplemental health and life insurance products. It operates through two segments, Aflac Japan and Aflac U.S. The company has managed to increase dividends for 34 years in a row. Over the past decade, Aflac has managed to boost its dividend at a rate of 11.70% per year. Earnings per share rose from $2.95 to $5.85 over the past decade. The company is expected to earn $6.84 per share over the next year.

Currently, AFL stock is attractively valued at 10 times forward earnings and yields 2.50%. The company has been on my watchlist for a few months.

T. Rowe Price Group Inc (TROW) is a publicly owned investment manager that launches and manages equity and fixed income mutual funds. The company has managed to increase dividends for 30 years in a row. Over the past decade, T. Rowe Price Group has managed to boost its dividend at a rate of 14.50% per year. Earnings per share rose from $2.40 to $4.75 over the past decade. The company is expected to earn $4.78 per share over the next year.

Currently, TROWE stock is attractively valued at 14.20 times forward earnings and yields 3.20%. Check my analysis of T. Rowe Price for more information.

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