Dividend Growth Stocks with Highest Growth

I like dividend growth stocks in the second and third range because they are often not in focus of many mainstream investors and they are often much cheaper than dividend growth stocks from the Dow Jones (e.g. Johnson and Johnson). The third class of dividend growth stocks is the Dividend Challengers class. Those stocks raised dividends over a period of more than five consecutive years but less than 10 years. One day they could become a big dividend hero like Coca-Cola (KO) or Procter and Gamble (PG). But which stocks should we buy now?

I made a screen of the 105 Dividend Challengers and implemented two restrictions: The company should have a current buy or better recommendation and the stock should have positive earnings per share growth for the next five years of more than 10 percent yearly. Here are my favorite stocks: Walgreen Company (WAG), 3M (MMM) and Illinois Tool Works (ITW).

Source: Guru Focus

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