Do you know what can be difficult in the investment world? Finding growth stocks with dividends.
Many times, companies don’t start paying a dividend until the businesses have matured. That doesn’t mean that they have no more growth in them, but it does mean that the days of rapid growth are no longer there.
Instead, the company looks for steady growth while finding ways to return capital to shareholders. Finding a balance between growth and dividend consistency is tough. Not many companies can become strong dividend candidates and continue to grow at a level considered impressive.
However, some growth stocks have made this transition relatively well and now boast nice dividend streaks to boot. Admittedly, they’re not the types of streaks we see with PepsiCo (NYSE:PEP) or McDonald’s (NYSE:MCD), but they are something to take note of.
Let’s look at a few growth stocks with dividends.
Growth Stocks With Dividends: Starbucks (SBUX)
Starbucks (NASDAQ:SBUX) is a name that’s tough to ignore. It has cemented itself as a top consumer brand, both in the U.S. and abroad. China has become the company’s second-largest market, and it helped fuel the company to a top- and bottom-line beat last quarter.
While management did speak cautiously about China going forward, its outlook was still solid. Nike (NYSE:NKE) just reported earnings and showed strength in China too, so there’s hope that the consumer can continue to do well over there.
So what makes it a growth stock?
Analysts expect Starbucks to generate roughly 11.5% revenue growth in 2023 and 2024. That’s to go alongside earnings growth of 16% this year and almost 20% next year.
As for its dividend, the stock yields about 2.2%. However, management has made the dividend a real priority over the years with a five-year dividend growth rate of 12.6%.
A Dividend King Enters: Sysco (SYY)
Sysco (NYSE:SYY) has quietly become a dividend stud. It has paid its dividend out for decades now and has become a consistent stock for income-oriented and long-term investors. Despite being a public company since 1971, Sysco still has quite a bit of growth left.
Analysts expect almost 12% revenue growth this year and more than 20% earnings growth. In 2024, earnings estimates dip but still stand at an impressive 12%. For this, investors are paying just over 18 times earnings.
Despite being public for more than 50 years and garnering a $37 billion market capitalization, many investors aren’t quite sure what the company does. In Sysco’s own words:
“Sysco is the global leader in selling, marketing and distributing food and non-food products to restaurants, healthcare and educational facilities, lodging establishments and other customers around the world.”
Playing Defense With Growth: Raytheon (RTX)
Raytheon (NYSE:RTX) has also become a force to reckon with. The stock has been trading better lately, but it’s still well off its highs. For long-term investors with some patience, this could be an opportunity.
Despite sporting a $143 billion market cap, it often feels like Raytheon is overlooked.
Shares trade at less than 20 times earnings despite high-single-digit revenue growth forecasts for 2023 and 2024. While analysts expect just 5% earnings growth this year, consensus expectations call for an acceleration up to 15% growth in 2024.
The stock pays out a 2.4% dividend yield and recently gave that dividend payout a 7.3% boost in April. According to the company, “Raytheon Technologies has paid cash dividends on its common stock every year since 1936”.
Another interesting note? Raytheon has better gross margin and profit margin than Boeing (NYSE:BA), Lockheed Martin (NYSE:LMT), Northrop Grumman (NYSE:NOC), and General Dynamics (NYSE:GD).
On the date of publication, Bret Kenwell did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
