https://money.usnews.com/investing/dividends/slideshows/9-solid-stocks-growing-their-dividendsSolid Stocks Growing Their Dividends
Sept. 5, 2018
When investors look for stocks paying dividends, sometimes they fall into the trap of simply picking a big dividend yield. However, chasing yield can have its flaws.
You have to hold a stock for 12 months to get the full annualized dividend yield – and a lot can happen in that period, including potential reductions to payouts or severe declines in stock price. A better strategy for many investors over the long term is to hold a stable stock that continues to grow its dividend consistently.
These dividend growers may not offer the biggest yield, but they do offer the potential of steady increases in payouts and a lot of consistency as a result.
1. CVS Health Corp. (ticker: CVS). Health giant CVS saw some downward pressure in the wake of a massive $69 billion bid for health insurer Aetna (AET) in March. However, shares have bounced back recently with the stock up about 25 percent from those spring lows on increased optimism about the long-term prospects of this giant that is increasingly a one-stop shop for all things in health care.
For income investors, the dividend is nice but the long-term history of increases is even better. CVS pays a current rate of $2 annually per share, an extraordinary increase over the 28 cents it paid in 2008.
2. Microsoft Corp. (MSFT). Software giant Microsoft has been on a tear in the last few years, with its stock tripling since 2013 thanks to the shrewd leadership of CEO Satya Nadella. A new focus on cloud computing and a rejuvenation of the brand has helped propel this tech giant to new all-time highs like clockwork. The dividend has kept pace with that sharp upward climb, too.
Though a relatively new kid on the dividend block, tech giant Microsoft has wasted no time showing how generous it can be with payouts; dividends were 52 cents in 2008 and are currently pacing an annual rate of $1.68. – Jeff Reeves
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1. CVS
2. MSFT
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