Stocks Growing Dividends by 20% Per Year

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?

But there are other reasons to value dividend growth so highly, and they're well supported by research. For instance, 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. With that in mind, here are five stocks that have grown their dividends by more than 20% annually over the last three years: Cliffs Natural Resources (NYSE: CLF), Walgreen (NYSE: WAG), Guess (NYSE: GES), Wisconsin Energy (NYSE: WEC) and Textainer Group (NYSE: TGH).

Source: Motley Fool

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