Stocks that have a strong history of dividend growth act as a hedge against any market downturn and economic or political turmoil because these belong to mature companies, which are less susceptible to large swings in the market. These stocks have superior fundamentals as opposed to their traditional dividend counterparts such as a sustainable business model, a long track record of profitability, rising cash flows, good liquidity, strong balance sheet and some value characteristics. They have a history of outperformance over the long term but not necessarily high dividend yields. All these makes dividend growth a quality and promising investment metric for the long term.
Further, a history of strong dividend growth indicates that a future dividend increase is likely. This makes the portfolio healthy and safe. Now let’s take a look at five of the ten stocks that fit the bill: Packaging Corp of America (PKG), Gentex Corporation (GNTX), Tyson Foods, Inc. (TSN), Dick’s Sporting Goods Inc (DKS) and Unum Group (UNM).
Source: InvestorPlace
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