[Editor’s note: This story was previously published in February 2019. It has since been updated and republished.]

Far too often, investors view stocks through a one-dimensional lens. A search for dividend stocks may lead one to only consider current yields, for instance, while ignoring the pace at which that company’s payout improves over time. At the other end of the spectrum, many solid growth stocks may have been overlooked only because investors didn’t factor in an impressive dividend or dividend growth history.

In other words, there’s often more to the story, and those details can really matter.

With that as the backdrop, here’s a rundown of some of the market’s top dividend growth stocks … names that aren’t getting the respect they deserve because traders are ignoring details that matter. They may not lead either the dividend or growth categories as they stand, but on a bigger-picture basis, these picks ultimately offer up better, risk-adjusted bottom lines. They just need time to prove it.

In no particular order…

 

United Technologies (UTX)

Dividend Yield: 2.23%

United Technologies (NYSE:UTX) presents investors with something of a choice — or will soon anyway. That is, by the end of next year it’s going to be split into three separate companies. They’ll each be standing on their own once that happens, for better or worse, relying on their unique strengths and working to abate their weaknesses.

Still, the same management teams that made each division a part of a great whole will remain intact, doing their thing, and achieving the same success they’re achieving now. At least one of the three will keep the company’s streak of 25 consecutive years of dividend increases alive. And, odds are good the most dividend-oriented unit’s payout will become even (relatively) bigger as each division goes its separate way, upping the combined company’s current yield of 2.23%.

Most likely, it will be the aerospace and defense arm that continues to carry the torch.

Becton Dickinson (BDX)

Dividend Yield: 1.23%

The current yield of 1.23% is anything but a jaw-dropper, but Becton Dickinson (NYSE:BDX) can’t fairly be boiled down to one metric. The medical equipment maker has a long history of above-average revenue growth and even more impressive earnings growth. Sales are expected to improve a little more than 9% this year, driving a 10% increase in per-share profits.

But still, does BDX stock offer anything to income-minded investors? Actually, it does. It has upped its dividend for 47 straight years, with the most recent one by a respectable 2.7%.

Paying it is a quite comfortable matter too. Its average payout ratio is historically only about one-fourth of its profits.

Outfront Media (OUT)

Dividend Yield: 6.06%

Outfront Media (NYSE:OUT) isn’t exactly a household name. The company offers a variety of outdoor advertising options well beyond billboards, but as an organization that makes a point of featuring clients’ brands rather than its own, consumers rarely even think about who’s making those ads possible.

Still, as an REIT, it’s a name built from the ground up to pay dividends. Its current yield is a head-turning 6.06%, and its total payout has grown slowly but reliably since early 2016. Revenue and income growth have been almost as steady.

The secret of Outfront Media’s success has been overwhelming market domination. It’s established in 140 markets with a variety of traditional and non-traditional assets, and in areas where it’s not as strong, it’s able to buy its way into consumers’ views. Case in point: Early last year the company began the deployment of more than 50,000 “liveboards” in New York’s most-traveled transportation stations.

Broadcom (AVGO)

Dividend Yield: 3.5%

The market has been doubting Broadcom (NASDAQ:AVGO) since late 2017, when the stock stopped rallying and spent the better part of last year dwindling its way to lower lows.

Big mistake. Revenue never stopped growing. Neither did earnings. In fact, both reached record levels in 2018. Investors now recognize the mistake, and are working to correct it. Even with the 36% gain since July’s low, though, AVGO is still a bargain by almost any standard. The  forward-looking earnings multiple of 12 is cheap.

Best of all, the yield of 3.5% is downright incredible by tech stock standards. Indeed, it’s even high compared to the most typical, garden-variety dividend stocks.

Illinois Tool Works (ITW)

Dividend Yield: 2.7%

Illinois Tool Works (NYSE:ITW) is trying to put a tough 2018 behind it. The stock fell from a January 2018 high of $179 to a low near $118 in December of last year.

This is another case, though, where doubts in this dividend stock have been mostly unmerited. Organic revenue growth reached 1% in Q4, driving a 70-basis-point increase in operating margins. It’s not stellar, but it’s more than good enough to support the current yield of 2.7% … an annualized dividend that has expanded for more than 50 consecutive years.

Cullen/Frost Bankers (CFR)

Dividend Yield: 2.65%

Don’t come to the wrong conclusion about Cullen/Frost Bankers (NYSE:CFR). It offers traditional consumer-facing banking services through its Frost Bank. Its strengths lies in business banking though, and less traditional banking activities like investment services and insurance.

Regardless of the revenue and earnings mix, Cullen/Frost has earned its spot on a list of the market’s top dividend stocks. Its yield of 2.65% is in line with its peers, but the bullish case is bolstered by 25 years’ worth of dividend increases that have proven more than affordable.

Earnings of $5.51 per share in 2017 improved to $6.90 last year, and are expected to reach $7.09 this year. With four straight earnings beats to its credit though, that outlook may underestimate what the company’s actually got in store in terms of future profits and dividend improvements.

Sherwin-Williams (SHW)

Dividend Yield: 1%

It’s still a paint company, but Sherwin-Williams (NYSE:SHW) isn’t just a paint company any longer. The outfit offers a variety of coatings that cater to the special needs of several industries including automobiles.

Its product diversity hasn’t helped a whole lot of late. Sherwin-Williams missed its fourth-quarter earnings estimate, and the company couldn’t soothe worried investors with a compelling 2019 earnings outlook. The dividend yield of 1% isn’t much to write home about either.

All the same, this is a name that is still logging steady increases in its payout, and if you can look past its acquisition-related expenses, is still growing its top and bottom lines. Same-store sales were up 5.1% in Q4, and full-year operating cash flows reached a record-breaking $2.04 billion in 2018.

A.O. Smith (AOS)

Dividend Yield: 1.63%

A.O. Smith (NYSE:AOS) may not have the clout it used to, as the world has moved on and left old-guard industrial names behind. This “old school” manufacturing outfit still has a few tricks up its sleeve though.

The numbers confirm it. Last year’s top line of $3.2 billion was up from 2017’s $3 billion, and earnings improved from $296.5 million to $444.2 million. Both were records.

Where A.O. Smith really shines among dividend stocks, however, is when you look at it as a dividend growth stock. Not only has it boosted its payout for 13 straight years now, it has boosted them in a big way.

Caterpillar (CAT)

Dividend Yield: 2.45%

This dividend stock may be surrounded by concerns about the tariff war with China, but take a good look at the results Caterpillar (NYSE:CAT) has achieved of late. For all the caterwauling it and its peers have dished out, revenue has grown every quarter since the beginning of 2017, and operating income has grown almost as reliably.

Dividends have continued to grow as much as they ever have too. CAT has had 25 straight years of dividend growth, and the industrial machinery outfit has never really struggled to pay it.

One big upside to the unmerited doubt — the stock’s big pullback from the early 2018 peak translates into an attractive yield of 2.45%.

Genuine Parts Company (GPC)

Dividend Yield: 2.7%

Finally, auto parts retailer Genuine Parts Company (NYSE:GPC) — you may know it better as NAPA — currently yields a healthy 2.7%. That’s a dividend, however, that has grown for 62 consecutive years.

It has been big-time growth too. The trailing-12-month payout of $3.05 is markedly better than the annualized payout of $1.15 from just ten years ago, but only reflects the company’s earnings growth for the same timeframe.

Those who know the company well will know earnings growth has stagnated over the course of the past three years, with a frenzy of new auto sales crimping demand for repairs. A huge swath of newly made automobiles are now between three to five years old now, however, and will start showing some wear and tear that drives sales of replacement parts. At the same time, nearly half the cars on U.S. roads now are at least 12 years old, and as such are also flirting with the need for a repair.

Both trends play right into Genuine Parts Company’s hands, making it one of the smart dividend stocks to look at now.

As of this writing, James Brumley held a long position in Broadcom and Illinois Tool Works. You can follow him on Twitter, at @jbrumley.