When it comes to dividend stocks, there are many ways to evaluate them, because there are many types of investors looking for many different things.
One investor might only care about yield. Another investor might just care about stability in the payout, even if it doesn’t throw off much income. When it comes to dividend stocks, I care about several things — and among them is dividend growth.
I like to look for dividend stocks that are growing earnings quickly. On top of that, I want companies with low payout ratios — how much the dividend is as a percentage of earnings — because that indicates that there’s room for more, and generous, dividend increases along the line. And, of course, you want to examine which dividend stocks are growing their payouts on a regular basis.
Dividend growth is a good signal that a company is either growing cash flow or has stable enough cash flow that it can increase its payout ratio. That speaks to long-term health of a company as well, so you get your security too.
The following is a list of seven dividend stocks whose payouts grow like weeds. Depending on things like your risk tolerance and how much yield you need up front, some of these stocks might be for you, and others might not. This is a place to begin your research so you can make the right decision for the investor that matters — you.