4 Dirt-Cheap Dividend Growth Stocks

Dividend growth stocks deserve a place in your portfolio, no matter how modest the allocation, simply because they often return 100% to 200% or better relatively quickly as their payouts rise. You’ve probably noticed you rarely see your favorite stock paying more than 2% or 3%, even if the company raises its dividend every year. That’s because its price gets bid up as its payout rises – so you never quite get the bargain 4% yield you’re always waiting for, unless something really bad happens (like 2008).

I’d ditch the expensive blue chips for underappreciated midcaps – which usually outperform their larger counterparts anyway. Here are four stocks from my watch list trading at less than 10-times free cash flow. All are growing their payouts quickly AND reducing their share counts meaningfully – a bullish sign of things to come: SunTrust Banks, Inc. (STI), Travelers Companies Inc (TRV), Valero Energy Corporation (VLO) and GATX Corporation (GATX).

Source: InvestorPlace

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