5 stocks with 10%+ annual dividend growth for past 5 years

Jai Nielsen

Hot

8 mins

Oct 10, 2022 16:41

Here are five stocks that have increased their dividend at a 10% annual clip or better over the past five years.

There are a lot of different investing strategies out there, but one that has stood the test of time is buying stocks that have rising dividends.

As a news article, I believe that it is sensible for a company to increase its dividend payments as a way of showing investors that management believes that the company's earnings are sustainable. This act can be seen as a barometer of sincerity, and I believe that it is a positive sign for the future of the company.

I think that dividend-paying stocks are especially sensible right now, since they usually hold up better than most during a bear market. This is a time when many investors are feeling nervous and uncertain, but I believe that dividend stocks can provide stability and potential for growth even in tough times. I think this is a smart strategy for long-term investors to consider right now.

These five stocks have increased their dividends by 10% or more every year for the past five years. Their dividend yields (the percentage of the stock price that is paid out as a dividend each year) are all at least 2.5%. This means that these stocks offer investors a great combination of income and growth potential.

In terms of dividend growth, Pioneer Natural Resources is in a league of its own, with a 123% growth rate over the past five years. It also has one of the highest dividend yields around, at 7.9%. This makes it a great choice for investors looking for income growth.

Scott Sheffield, the longtime CEO of Pioneer, was one of the first people to recognize the potential for fracking in the Permian Basin, which includes west Texas and parts of New Mexico. The Permian actually comprises three basins, one of which—the Midland Basin—is dominated by Pioneer. Sheffield's vision for the Permian was to create a hub for fracking activity that would spur economic growth and create jobs in the area. Today, the Permian is one of the most active fracking regions in the world, and Pioneer is one of the leading companies in the space.

It's no secret that the oil-and-gas industry is prone to boom-and-bust cycles. This is likely one of the reasons why the stock is reasonably priced at 11 times recent earnings. Investing in this industry can be risky, but if timed correctly, it can also be very rewarding.

Fort Myers was one of the hardest hit areas by Hurricane Ian. The storm caused extensive damage to the town, including the headquarters of Alico. The company owns citrus groves and leases land to others in Florida, and the hurricane has left them with a lot of work to do in order to recover.

The hurricane was intense, and it will take the company some time to return to normal. This doesn't necessarily mean that the company will be prosperous, as its earnings have been spotty.

I think Alico is an interesting speculation even though the stock was down 17% in the week that ended October 10. With a P/E ratio of only six and a price-to-book value of less than one, I believe there is potential for significant upside in the stock price.

I see Alico as a long-term investment play. The company owns a large amount of land in Florida, and while the dividend might be cut in the future, the current yield is 7.2%. The five-year dividend growth rate is also impressive at 32%. I believe that over the long run, this company will be a great investment for those looking for dividend income.

CompX International is a great company for investors looking for dividend growth. The company has grown its dividend at a 30% clip over the past five years, and currently offers a 5.4% dividend yield. Based in Dallas, the company makes cabinet locks, door locks, ignition switches and many other kinds of locks.

CompX has been a consistent performer over the past decade, growing sales at close to 5% per year and earnings at a faster clip. In the past four quarters, earnings have jumped 38%, reflecting in part increased demand for cabinets as people spend more time at home. The company has responded by hiking its dividend 50%. CompX is a reliable, well-run company that should continue to perform well in the years ahead.

Despite a slight dip in the past year, Tyson Foods remains a powerful force in the meat industry, and I believe they will continue to be a top contender in the years to come. With a strong history of growth and a bright future ahead, Tyson Foods is a company that I recommend keeping an eye on.

I continue to like Tyson Foods even more now than I did before, simply because the stock is selling for less than six times recent earnings. Dividends have grown at a 24% annual pace the past five years, and the yield is now up to 2.9%. This company is a great value play in the food industry, and I believe it will continue to outperform the market in the years to come.

Looking ahead, Packaging Corp. of America (PKG) is poised for continued growth, as the trend toward internet shopping is likely to continue. This will result in increased demand for boxes and packaging materials, which the company is well-positioned to provide. shareholders can expect continued dividend increases, at a rate in line with the company's historical growth.

I believe that home delivery will continue to be a rising trend even after the pandemic ends. The convenience and safety that it provides will continue to be appealing to consumers, even as life returns to some semblance of normalcy. The stock sells for only 11 times earnings, which I believe is a bargain given the long-term prospects of the home delivery industry.

Looking back at our past record, we see some interesting patterns emerge.

I'm disappointed with my recent results in picking stocks with dividend appeal. My average 12-month return has been 9.6%, compared to 9.5% for the Standard & Poor's 500 Total Return Index. I'm hoping to improve my results in the future to get a better margin of victory.

I have raised the bar for what stocks I will consider investing in this year. To be considered, a stock must now have a dividend yield of at least 2.5% and a dividend growth rate of 10% or better. This will help me to improve my performance and continue to grow my portfolio.

I'm not happy about the results of my picks from a year ago- a decline of 18.5% compared to the S&P 500's 15.3% drop. The biggest contributor to my losses was Paramount Global, which saw a significant decline.

Bear in mind that my column results are hypothetical and shouldn’t be confused with results I obtain for clients. Also, past performance doesn’t predict the future. However, I believe that if you follow my advice, you can improve your investment results.

Forbes Special Report: Five Bear-Market Dividend Buys To Whip Inflation With inflation on the rise, many investors are turning to dividend stocks as a way to protect their portfolios.

I see a future in which Pioneer Natural Resources, Paramount Global, and Tyson Foods continue to thrive and grow. disclosure: I own these companies personally and for most of my clients. I believe that they are all well-positioned to continue to be leaders in their respective industries.