Dividends4Life: Stocks Growing Their Dividends By 25%

Stocks Growing Their Dividends By 25%

Posted by D4L | Friday, August 23, 2013 | | 0 comments »

Dividend investors would be wise to focus not just on a stock's current yield, but also on the long-term growth potential of its dividends. That's because strong businesses that consistently raise their dividend payouts reward shareholders with a steadily rising income stream that essentially equates to a raise every year. And, well, who doesn't like a raise?

A study by C. Thomas Howard published in Advisor Perspectives found that for every percentage point a stock's yield rises, its annual return increases by 0.22 percentage points if it's a large cap, 0.25 if it's a mid cap, and 0.46 if it's a small cap. Even better, Howard found that dividend-growing stocks outperformed dividend cutters by 10 percentage points per year from 1973 to 2010 and beat both flat- and no-dividend stocks. Here are five stocks that have grown their dividends by more than 25% over the past year: Amgen (NASDAQ: AMGN), Corning (NYSE: GLW), Coach (NYSE: COH), Cummins (NYSE: CMI) and Disney (NYSE: DIS).

Source: Motley Fool

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