Up to date on June 14th, 2023 by Bob Ciura
Earnings buyers are inclined to give attention to shares with the very best dividend yields. However dividend progress can also be an vital consideration when setting up an revenue portfolio.
Whereas high-yield shares are interesting for the revenue they supply within the short-term, one of the best dividend progress shares are equally interesting because of the potential for even increased dividend revenue over the long term.
For instance, the Dividend Aristocrats are among the many greatest dividend progress shares. The Dividend Aristocrats characterize 68 corporations within the S&P 500 Index, which have every raised their dividends for at the very least 25 consecutive years.
You possibly can obtain an Excel spreadsheet of all 68 (with metrics that matter) by clicking the hyperlink beneath:
The Dividend Aristocrats are broadly considered among the many greatest dividend progress shares. However they didn’t begin out as Dividend Aristocrats.
It is usually helpful for buyers to think about a few of the greatest dividend progress shares that won’t have as lengthy of a dividend historical past proper now, however have the potential to change into the subsequent Dividend Aristocrats.
Buyers ought to give attention to high-quality corporations with sturdy aggressive benefits, constant progress, and the power to lift their dividends over the long run.
These greatest dividend progress shares aren’t all on the record of Dividend Aristocrats. However in any case, they’ve the potential to lift their dividends at a excessive charge annually, and maybe be among the many future Dividend Aristocrats.
Desk Of Contents
The highest 12 greatest dividend progress shares record is comprised of shares with dividend yields at or above the S&P 500 common (at present 1.6%), in addition to Dividend Danger scores of ‘C’ or higher.
Lastly, all 12 shares have optimistic anticipated EPS progress of at the very least 10% per 12 months, making them extra prone to exhibit increased dividend progress charges.
The perfect dividend progress shares are listed by 5-year anticipated whole returns within the Positive Evaluation Analysis Database, so as of lowest to highest.
You possibly can immediately soar to a selected inventory by clicking on the hyperlinks beneath:
Dividend Development Inventory #12: Starbucks Corp. (SBUX)
Starbucks has greater than 36,000 shops worldwide. About half of the shops are within the U.S., and almost 20% of the shops are in China. The corporate operates below the namesake Starbucks model but in addition holds the Teavana, Evolution Contemporary, and Ethos Water manufacturers in its portfolio. The corporate generated $32 billion in annual income in fiscal 2022.
In early Could, Starbucks reported (5/2/23) monetary outcomes for the second quarter of fiscal 12 months 2023. The corporate loved accelerated enterprise momentum and grew its comparable retailer gross sales 11% because of 12% progress within the U.S. and seven% progress in worldwide markets.
Supply: Investor Presentation
Adjusted earnings-per-share grew 25%, from $0.59 within the prior 12 months’s quarter to $0.74, and exceeded the analysts’ consensus by $0.09. The headwinds from the lockdowns in China and excessive inflation have subsided. Starbucks reiterated its optimistic steerage for 2023, anticipating progress of earnings-per-share on the low finish of its long-term steerage of 15%-20% progress.
Starbucks is among the many greatest dividend progress shares resulting from its world-class model and lengthy historical past of progress.
Click on right here to obtain our most up-to-date Positive Evaluation report on Starbucks Company (SBUX) (preview of web page 1 of three proven beneath):
Dividend Development Inventory #11: Yum Manufacturers (YUM)
Yum Manufacturers owns the KFC, Pizza Hut, Taco Bell, and The Behavior Eating places chains. It’s current in additional than 155 international locations and has greater than 54,000 eating places, 60% of that are situated overseas. KFC generates about half of the whole income and working revenue of the corporate.
In early Could, Yum Manufacturers reported (5/3/23) monetary outcomes for the primary quarter of 2023.
Supply: Investor Presentation
The corporate grew its currency-neutral gross sales 11% over the prior 12 months’s quarter thanks to eight% same-store gross sales progress and three% progress of retailer rely. KFC, Taco Bell, and Pizza Hut grew their gross sales 11%, 12% and 10%, respectively.
Click on right here to obtain our most up-to-date Positive Evaluation report on Yum Manufacturers (preview of web page 1 of three proven beneath):
Dividend Development Inventory #10: Horace Mann Educators Corp. (HMN)
Horace Mann Educators Company was based in 1945 by two academics from Springfield, Illinois, who acknowledged the necessity for high quality and reasonably priced auto insurance coverage for academics. At present, the corporate is the biggest monetary companies supplier that focuses on serving the training neighborhood and those that serve the neighborhood. The corporate’s major prospects are educators, but it surely additionally serves people and organizations within the public sector.
Supply: Investor Presentation
Horace Mann presents a variety of monetary and insurance coverage merchandise, together with retirement annuities, life insurance coverage, and property and casualty insurance coverage. The corporate has a powerful market presence and is taken into account a frontrunner within the training insurance coverage market. General, Horace Mann Educators Company has a long-standing repute for serving the training neighborhood and has a major market share within the Okay-12 training market.
Click on right here to obtain our most up-to-date Positive Evaluation report on HMN (preview of web page 1 of three proven beneath):
Dividend Development Inventory #9: RB International (RBA)
Ritchie Bros. presents end-to-end options for purchasing and promoting used heavy gear, vans, and different belongings. The corporate’s major promoting channels embody Ritchie Bros. Auctioneers, the world’s largest industrial auctioneer that includes on-line bidding, IronPlanet, a web based market with weekly auctions, and IronClad Assurance, which offers gear situation certification. The corporate generates round $1.7 billion in annual revenues, and relies in Burnaby, Canada.
Supply: Investor Presentation
On Could tenth, 2023, Ritchie Bros. reported its Q1 outcomes for the interval ending March thirty first, 2023. For the quarter, revenues rose 30.1% year-over-year to $512.4 million. This was resulting from whole service revenues and stock gross sales revenues rising by 40% and 13% to $343.6 and $168.8, respectively. Whole income progress consists of $80 million from the influence of the acquisition of IAA.
Click on right here to obtain our most up-to-date Positive Evaluation report on RB International (preview of web page 1 of three proven beneath):
Dividend Development Inventory #8: House Bancshares Inc. (HOMB)
House Bancshares is a financial institution holding firm. Clients in Arkansas, Florida, Alabama, and New York can entry quite a lot of monetary companies through Centennial Financial institution, the corporate’s most important subsidiary. Greater than 300,000 shoppers are served by the corporate’s greater than 222 department websites.
House Bancshares holds a aggressive place within the banking sector and locations a excessive precedence on providing glorious consumer care and inventive monetary options. The enterprise derives revenue from a number of markets, together with industrial loans, residential loans, client loans, and deposit accounts, and has a market share of about 1% within the US banking trade.
Click on right here to obtain our most up-to-date Positive Evaluation report on House Bancshares (HOMB) (preview of web page 1 of three proven beneath):
Dividend Development Inventory #7: NextEra Power Companions (NEP)
NextEra Power Companions was fashioned in 2014 as Delaware Restricted Partnership by NextEra Power to personal, function, and purchase contracted clear vitality initiatives with steady, long-term money flows. The corporate’s technique is to capitalize on the vitality trade’s favorable tendencies in North America of fresh vitality initiatives changing uneconomic initiatives.
NextEra Power Companions operates 34 contracted renewable era belongings consisting of wind and photo voltaic initiatives in 12 states throughout america. The corporate additionally operates contracted pure fuel pipelines in Texas which accounts for a couple of fifth of NextEra Power Companions’ revenue.
Supply: Investor Presentation
On April twenty fifth, 2023, NextEra Power, Inc. posted its first-quarter monetary outcomes. NextEra Power Companions reported Q1 GAAP EPS of -$0.17, lacking expectations by $0.61, whereas income of $301M missed expectations by $54.92M. The corporate expects 12-15% progress per 12 months in restricted accomplice distributions per unit via at the very least 2026 and anticipates a This fall 2023 annualized distribution charge of $3.64 to $3.74 per frequent unit.
Click on right here to obtain our most up-to-date Positive Evaluation report on NextEra Companions (NEP) (preview of web page 1 of three proven beneath):
Dividend Development Inventory #6: Goal Corp. (TGT)
Goal is a huge low cost retailer. Its enterprise consists of about 1,850 massive field shops, which supply normal merchandise and meals, in addition to serving as distribution factors for the corporate’s burgeoning e-commerce enterprise. Goal ought to produce about $110 billion in whole income this 12 months.
Goal posted first quarter earnings on Could seventeenth, 2023, and outcomes had been higher than anticipated on each the highest andbottom strains. Adjusted earnings-per-share got here to $2.05, which was 29 cents higher than anticipated. Income was upfractionally year-over-year to $25.3 billion, beating estimates by $40 million.
Click on right here to obtain our most up-to-date Positive Evaluation report on Goal (TGT) (preview of web page 1 of three proven beneath):
Dividend Development Inventory #5: Magna Worldwide Inc. (MGA)
Magna Worldwide is the biggest automotive provider in North America and the fourth-largest on this planet. Magna has elevated its dividend yearly since 2010.
Magna reported its Q1 2023 outcomes on 05/05/2023. For the quarter, its international gentle automobile manufacturing elevated by 3% vs Q1 2022. As effectively, its gross sales of $10,673 million was a rise of 11% 12 months over 12 months. Earnings from operations earlier than revenue taxes fell 35% to $275 million. Consequently, web revenue declined 43% to $209 million.
Adjusted diluted earnings-per-share (“EPS”) of $1.11 was a decline of 13% 12 months over 12 months. This decline is far more palatable than the leads to This fall 2022.
Click on right here to obtain our most up-to-date Positive Evaluation report on Magna Worldwide (MGA) (preview of web page 1 of three proven beneath):
Dividend Development Inventory #4: Cigna Group (CI)
Cigna is a number one supplier of insurance coverage services. The corporate’s merchandise embody dental, medical, incapacity and life insurance coverage that it offers via employer-sponsored, government-sponsored and particular person protection plans.
Supply: Investor Presentation
On Could fifth, 2023, Cigna reported first quarter outcomes for the interval ending March thirty first, 2023. For the quarter, income grew 5.6% to $46.5 billion, which was $1.05 billion greater than anticipated. Adjusted earnings-per-share of $5.41 in comparison with adjusted earnings-per-share of $6.01 within the prior 12 months, however was $0.17 above estimates.
Click on right here to obtain our most up-to-date Positive Evaluation report on Cigna (preview of web page 1 of three proven beneath):
Dividend Development Inventory #3: Dominos Pizza (DPZ)
Domino’s Pizza is the biggest pizza firm on this planet based mostly on international retail gross sales. The corporate operates greater than 20,000 shops in additional than 90 international locations. It generates almost half of its gross sales within the U.S. whereas 99% of its shops worldwide are owned by unbiased franchisees.
In late April, Domino’s reported (4/27/23) monetary outcomes for the primary quarter of fiscal 2023. Its worldwide identical retailer gross sales grew 1.2% over the prior 12 months’s quarter and its U.S. same-store gross sales grew 3.6%, principally thanks to cost hikes. Earnings-per-share grew 17%, from $2.50 to $2.93, and exceeded the analysts’ consensus by $0.21 thanks to cost hikes, the opening of recent shops and share repurchases.
Click on right here to obtain our most up-to-date Positive Evaluation report on Dominos Pizza (DPZ) (preview of web page 1 of three proven beneath):
Dividend Development Inventory #2: Hannon Armstrong Sustainable Infrastructure (HASI)
Hannon Armstrong Sustainable Infrastructure Capital, Inc. is an organization that’s targeted on offering capital for companies within the vitality effectivity, renewable vitality, and sustainable infrastructure industries.
Supply. Hannon Armstrong Sustainable Infrastructure Capital presentation
The industries Hannon Armstrong offers capital for are rising, partly resulting from huge public investments and incentives by governments and regulators. There thus is ample market progress for Hannon Armstrong to focus on. We imagine that Hannon Armstrong will develop its income at a low double-digit tempo over the approaching 5 years, which is a powerful progress charge for an revenue inventory.
Between its stable dividend yield and excessive earnings progress, Hannon Armstrong ought to ship compelling whole returns over the approaching years, making the corporate top-of-the-line dividend progress shares.
Click on right here to obtain our most up-to-date Positive Evaluation report on Hannon Armstrong (HASI) (preview of web page 1 of three proven beneath):
Dividend Development Inventory #1: Baxter Worldwide (BAX)
Baxter Worldwide develops and sells quite a lot of healthcare merchandise, together with organic merchandise, medical gadgets, and related care companies gadgets used to observe sufferers. Its merchandise are utilized in hospitals, kidney dialysis facilities, nursing houses, docs’ places of work, and sufferers at residence below doctor supervision. Baxter has paid dividends to shareholders for 32 consecutive years.
On April twenty seventh, 2023, Baxter Worldwide reported Q1 2023 outcomes for the interval ending March thirty first, 2023. For the quarter, income fell 1.6% to $3.65 billion, however this was $50 million greater than anticipated. Adjusted earnings-per-share of $0.59 in contrast unfavorably to $0.93 within the prior 12 months, however was $0.06 forward of estimates.
Baxter takes the highest spot among the many greatest dividend progress shares resulting from its anticipated earnings and dividend progress, and engaging anticipated returns.
Click on right here to obtain our most up-to-date Positive Evaluation report on Baxter (BAX) (preview of web page 1 of three proven beneath):
Last Ideas
Buyers mustn’t ignore one of the best dividend progress shares just because many have low present dividend yields. Corporations with sturdy enterprise fashions, aggressive benefits, and progress potential are engaging no matter their beginning yields.
The perfect dividend progress shares unleash the facility of compounding. There are various circumstances through which one of the best dividend progress shares might produce the next yield on price over time than a inventory with the next present yield however little or no dividend progress.
These 12 of one of the best dividend progress shares have the potential to lift their dividends by 10% per 12 months or extra for the foreseeable future, which makes them a beautiful mixture of dividend progress and whole returns.
Different Dividend Lists
The Dividend Aristocrats record isn’t the one option to shortly display screen for one of the best dividend progress shares. If you’re excited by discovering extra of one of the best dividend progress shares, the next Positive Dividend assets will probably be of curiosity to you.
Blue Chip Inventory Investing
Different Positive Dividend Sources
Thanks for studying this text. Please ship any suggestions, corrections, or inquiries to [email protected].