10 Best Dividend Growth Stocks to Buy Now

Published on September 26, 2022 at 4:24 pm by Vardah Gill in Hedge Funds, News

In this article, we discuss 10 best dividend growth stocks to buy now. You can skip our detailed analysis of dividend growth stocks and their returns in the past, and go directly to read 5 Best Dividend Growth Stocks to Buy Now.

In times of market volatility, investors often turn to dividend growth stocks to ensure regular income. Dividend growth investing involves buying shares of companies that hold solid records of increasing their payouts over time. In addition to this, these high-quality companies have strong cash flow generation, which supports their dividend payments and also indicates further dividend growth.

As the current economic crisis has sent stock markets into a tailspin, investors around the world are holding onto strong dividend companies. The historical analysis of dividend growers has shown their outperformance in periods of market turbulence. According to a report by T. Rowe Price, dividend stocks in Russell 1000 outplayed the benchmark during down and flat markets from 1985 to December 2020. During down markets, Russell 1000 fell by 18%, whereas dividend growers declined by 12.1% in comparison.

Analysts are also supporting dividend investments this year as the market moves towards uncertainty. Nuveen’s Chief Investment Officer Saira Malik talked about opportunities in dividend stocks in her interview with CNBC this July. She said that investors should look for companies with pricing power and resilience. She further said that as dividend growers have strong balance sheets, they tend to do well during periods of higher inflation and higher interest rates. Similarly, Todd Rosenbluth of VettaFi also emphasized the importance of dividend growers in his interview with the same media channel in September. He asserted that companies that grow their dividends are most likely to keep up with the changing market conditions. Dividend stocks that are popular among investors include The Coca-Cola Company (NYSE:KO), The Procter & Gamble Company (NYSE:PG), and Johnson & Johnson (NYSE:JNJ) due to their dividend growth histories and sound financials.

The returns of dividend growers this year have been phenomenal, surpassing other asset classes so far. MSCI World Dividend Growers Quality Select tracks the performance of 80 stocks across 23 developed markets that have consistently raised their dividends. The index returned -0.70% this year as of August 2022, compared with an 8.06% drop of MSCI World during the same period. Further evaluating the above-mentioned arguments, we will discuss the best dividend growth stocks to buy now.

Our Methodology:

For this list, we selected stocks that have raised their dividends for at least five years. We also analyzed these stocks through their five-year average dividend growth rate. In addition to this, these companies have solid cash flow positions to weather market storms like the one we are confronted with today.

10. Houlihan Lokey, Inc. (NYSE:HLI)

Years of Consistent Dividend Growth: 5

5-Year Compound Average Dividend Growth Rate: 20.05%

Houlihan Lokey, Inc. (NYSE:HLI) is a California-based multinational independent investment banking and financial services company. In July, Morgan Stanley upgraded the stock to Equal Weight with an $82 price target, as the company’s multiple has held up better than its peers during recessionary periods. In addition to this, the firm also appreciated the company’s Financial and Advisory segment.

At the end of June 2022, Houlihan Lokey, Inc. (NYSE:HLI) reported over $525 million in cash and cash equivalents and $53 million of other liabilities. In fiscal Q1 2023, the company reported revenue of $419 million, which showed a 12.4% year-over-year growth. Its net income for the quarter jumped to $70.7 million, from $65.1 million in the previous quarter.

Houlihan Lokey, Inc. (NYSE:HLI) currently pays a quarterly dividend of $0.53 per share, with a dividend yield of 2.76%, as recorded on September 25. The company has been raising its dividends consistently for five years and has raised its payouts at a CAGR of 20.05% during this period.

At the end of Q2 2022, 18 hedge funds tracked by Insider Monkey owned stakes in Houlihan Lokey, Inc. (NYSE:HLI), down from 22 in the previous quarter. These stakes hold a collective value of roughly $100 million. Among these hedge funds, Ancora Advisors was the company’s leading stakeholder in Q2.

In addition to popular dividend stocks like The Coca-Cola Company (NYSE:KO), The Procter & Gamble Company (NYSE:PG), and Johnson & Johnson (NYSE:JNJ), Houlihan Lokey, Inc. (NYSE:HLI) can be added to diversified dividend portfolios.

Baron Funds mentioned Houlihan Lokey, Inc. (NYSE:HLI) in its Q4 2021 investor letter. Here is what the firm has to say:

“Another standout in Capital Markets was advisory firm Houlihan Lokey, Inc., which nearly doubled revenues in the most recent quarter and completed a large, accretive acquisition of another advisory firm that significantly expands its global presence.”

9. Tetra Tech, Inc. (NASDAQ:TTEK)

Years of Consistent Dividend Growth: 7

5-Year Compound Average Dividend Growth Rate: 17.75%

Tetra Tech, Inc. (NASDAQ:TTEK) is an American consulting and engineering services firm that provides program management and construction management services in clean energy. The company has a 7-year run of raising its dividends consistently. In the past five years, it has raised its payouts at a CAGR of 17.75%, which makes it one of the most prominent dividend growth stocks. The company currently pays a dividend of $0.23 per share and has a dividend yield of 0.72%, as of September 25.

In fiscal Q3 2022, Tetra Tech, Inc. (NASDAQ:TTEK) reported strong cash generation as its operating cash flow came in at $98 million, up 42% from the same period last year. The company’s free cash flow stood at $95.6 million, compared with $91 million in the previous quarter. In the first nine months of its fiscal year, it returned $184 million to shareholders through dividends and share repurchases. The company’s solid cash flow signals future dividend stability.

In July, Northcoast started its coverage of Tetra Tech, Inc. (NASDAQ:TTEK) with a Neutral rating, as the firm initiated the water infrastructure space. The firm mentioned that demand for clean energy names is promising as compared to construction and municipal sectors.

The number of hedge funds tracked by Insider Monkey owning stakes in Tetra Tech, Inc. (NASDAQ:TTEK) stood at 29 in Q2 2022, growing from 21 in the previous quarter. These stakes hold a combined value of over $253.7 million.

8. JPMorgan Chase & Co. (NYSE:JPM)

Years of Consistent Dividend Growth: 7

5-Year Compound Average Dividend Growth Rate: 15.33%

JPMorgan Chase & Co. (NYSE:JPM) is another company on our list of the best dividend growth stocks to buy now. The American financial services company reported a 7% growth in its loans in Q2 2022 while its average deposits grew by 9% from the preceding quarter. The company generated over $66 billion in operating cash flow, which shows that its dividend payments are safe for the future.

JPMorgan Chase & Co. (NYSE:JPM) has been raising its dividends consistently for the past seven years. The company’s 5-year dividend CAGR stands at 15.33%. On September 20, it announced a quarterly dividend of $1.00 per share, in line with its previous dividend. The stock has a dividend yield of 3.67%, as of September 25.

In September, Deutsche Bank maintained its Buy rating on JPMorgan Chase & Co. (NYSE:JPM) with a $155 price target, presenting a positive stance on the banking sector in the current economic landscape.

Ken Fisher’s Fisher Asset Management had nearly $900 million worth of shares in JPMorgan Chase & Co. (NYSE:JPM) and was the company’s leading stakeholder in Q2 2022. Overall, 104 hedge funds in Insider Monkey’s database owned stakes in the banking company in Q2, down from 110 in the previous quarter. These stakes hold a total value of over $5.8 billion.

7. First American Financial Corporation (NYSE:FAF)

Years of Consistent Dividend Growth: 11

5-Year Compound Average Dividend Growth Rate: 8.4%

First American Financial Corporation (NYSE:FAF) is a California-based financial services company that provides services related to insurance and settlement to mortgage and real estate industries. The company was a part of 30 hedge fund portfolios in Q2 2022, compared with 31 in the previous quarter, according to Insider Monkey’s data. The stakes owned by these hedge funds are collectively worth over $1.09 billion.

In July, Truist reiterated its Buy rating on First American Financial Corporation (NYSE:FAF) with a $77 price target. The firm appreciated the company’s Q2 earnings and its weekly applications and rate lock data.

In Q2 2022, First American Financial Corporation (NYSE:FAF) reported $191 million in operating cash flow, up from $40 million in the previous quarter. The company’s free cash flow came in at $114 million. At the end of June, it had $1.74 billion in cash and cash equivalents and its total assets amounted to over $16.2 billion.

On August 4, First American Financial Corporation (NYSE:FAF) hiked its quarterly dividend by 2% to $0.52 per share. This marked the company’s 11th consecutive year of dividend growth. As of September 25, the stock has a dividend yield of 4.43%.

6. Packaging Corporation of America (NYSE:PKG)

Years of Consistent Dividend Growth: 11

5-Year Compound Average Dividend Growth Rate: 14.7%

Packaging Corporation of America (NYSE:PKG) is an Illinois-based manufacturing company that produces corrugated packaging products and uncoated free sheets in North America. In Q2 2022, the company generated nearly $320 million in operating cash flow, down from $325.3 million in the previous quarter. However, its free cash flow grew to $134.7 million, from $112 million a quarter earlier. The company’s revenue stood at $2.24 billion, up 19.1% from the same period last year.

In July, Wells Fargo mentioned Packaging Corporation of America (NYSE:PKG) in its investors’ note and highlighted the company’s solid execution and pricing initiatives. The firm also expects the demand for its products to remain strong post-pandemic. The firm maintained an Equal Weight rating on the stock.

On September 21, Packaging Corporation of America (NYSE:PKG) announced a quarterly dividend of $1.25 per share, consistent with its previous dividend. The company has been raising its dividends for the past 11 years consecutively, with a five-year CAGR of 14.7%. In addition to this, it has a healthy payout ratio of 35%. As of September 25, the stock’s dividend yield came in at 4.39%. The company’s dividend growth streak makes it favorable among investors alongside famous dividend stocks like The Coca-Cola Company (NYSE:KO), The Procter & Gamble Company (NYSE:PG), and Johnson & Johnson (NYSE:JNJ).

At the end of June 2022, 26 hedge funds in Insider Monkey’s database owned stakes in Packaging Corporation of America (NYSE:PKG), up from 25 a quarter earlier. These stakes have a consolidated value of over $247 million. Jim Simons, Cliff Asness, and Israel Englander were some of the company’s most prominent stakeholders in Q2.

Click to continue reading and see 5 Best Dividend Growth Stocks to Buy Now.

AI Fire Sale: Insider Monkey’s #1 AI Stock Pick Is On A Steep Discount

Published on May 1, 2024 at by Inan Dogan, PhD

Artificial intelligence is the greatest investment opportunity of our lifetime. The time to invest in groundbreaking AI is now, and this stock is a steal!

The whispers are turning into roars.

Artificial intelligence isn’t science fiction anymore.

It’s the revolution reshaping every industry on the planet.

From driverless cars to medical breakthroughs, AI is on the cusp of a global explosion, and savvy investors stand to reap the rewards.

Here’s why this is the prime moment to jump on the AI bandwagon:

Exponential Growth on the Horizon: Forget linear growth – AI is poised for a hockey stick trajectory.

Imagine every sector, from healthcare to finance, infused with superhuman intelligence.

We’re talking disease prediction, hyper-personalized marketing, and automated logistics that streamline everything.

This isn’t a maybe – it’s an inevitability.

Early investors will be the ones positioned to ride the wave of this technological tsunami.

Ground Floor Opportunity: Remember the early days of the internet?

Those who saw the potential of tech giants back then are sitting pretty today.

AI is at a similar inflection point.

We’re not talking about established players – we’re talking about nimble startups with groundbreaking ideas and the potential to become the next Google or Amazon.

This is your chance to get in before the rockets take off!

Disruption is the New Name of the Game: Let’s face it, complacency breeds stagnation.

AI is the ultimate disruptor, and it’s shaking the foundations of traditional industries.

The companies that embrace AI will thrive, while the dinosaurs clinging to outdated methods will be left in the dust.

As an investor, you want to be on the side of the winners, and AI is the winning ticket.

The Talent Pool is Overflowing: The world’s brightest minds are flocking to AI.

From computer scientists to mathematicians, the next generation of innovators is pouring its energy into this field.

This influx of talent guarantees a constant stream of groundbreaking ideas and rapid advancements.

By investing in AI, you’re essentially backing the future.

The future is powered by artificial intelligence, and the time to invest is NOW.

Don’t be a spectator in this technological revolution.

Dive into the AI gold rush and watch your portfolio soar alongside the brightest minds of our generation.

This isn’t just about making money – it’s about being part of the future.

So, buckle up and get ready for the ride of your investment life!

Act Now and Unlock a Potential 10,000% Return: This AI Stock is a Diamond in the Rough (But Our Help is Key!)

The AI revolution is upon us, and savvy investors stand to make a fortune.

But with so many choices, how do you find the hidden gem – the company poised for explosive growth?

That’s where our expertise comes in.

We’ve got the answer, but there’s a twist…

Imagine an AI company so groundbreaking, so far ahead of the curve, that even if its stock price quadrupled today, it would still be considered ridiculously cheap.

That’s the potential you’re looking at. This isn’t just about a decent return – we’re talking about a 10,000% gain over the next decade!

Our research team has identified a hidden gem – an AI company with cutting-edge technology, massive potential, and a current stock price that screams opportunity.

This company boasts the most advanced technology in the AI sector, putting them leagues ahead of competitors.

It’s like having a race car on a go-kart track.

They have a strong possibility of cornering entire markets, becoming the undisputed leader in their field.

Here’s the catch (it’s a good one): To uncover this sleeping giant, you’ll need our exclusive intel.

We want to make sure none of our valued readers miss out on this groundbreaking opportunity!

That’s why we’re slashing the price of our Premium Readership Newsletter by a whopping 75%.

For a ridiculously low price of just $24, you can unlock a year’s worth of in-depth investment research and exclusive insights – that’s less than a single restaurant meal!

Here’s why this is a deal you can’t afford to pass up:

The Name of the Game-Changing AI Stock: Our in-depth report dives deep into our #1 AI stock’s groundbreaking technology and massive growth potential.
Ad-Free Browsing: Enjoy a year of investment research free from distracting banner and pop-up ads, allowing you to focus on uncovering the next big opportunity.
Lifetime Money-Back Guarantee: If you’re not absolutely satisfied with our service, we’ll provide a full refund ANYTIME, no questions asked.

Space is Limited! Only 1000 spots are available for this exclusive offer. Don’t let this chance slip away – subscribe to our Premium Readership Newsletter today and unlock the potential for a life-changing investment.

Here’s what to do next:

Head over to our website and subscribe to our Premium Readership Newsletter for just $24.
Enjoy a year of ad-free browsing, exclusive access to our in-depth report on the revolutionary AI company, and the upcoming issues of our Premium Readership Newsletter over the next 12 months.
Sit back, relax, and know that you’re backed by our ironclad lifetime money-back guarantee.

Don’t miss out on this incredible opportunity! Subscribe now and take control of your AI investment future!

Subscribe Now!

A New Dawn is Coming to U.S. Stocks

Published on May 2, 2024 at by Insider Monkey Staff

I work for one of the largest independent financial publishers in the world – representing over 1 million people in 148 countries.

We’re independently funding today’s broadcast to address something on the mind of every investor in America right now…

Should I put my money in Artificial Intelligence?

Here to answer that for us… and give away his No. 1 free AI recommendation… is 50-year Wall Street titan, Marc Chaikin.

Marc’s been a trader, stockbroker, and analyst. He was the head of the options department at a major brokerage firm and is a sought-after expert for CNBC, Fox Business, Barron’s, and Yahoo! Finance…

But what Marc’s most known for is his award-winning stock-rating system. Which determines whether a stock could shoot sky-high in the next three to six months… or come crashing down.

That’s why Marc’s work appears in every Bloomberg and Reuters terminal on the planet…

And is still used by hundreds of banks, hedge funds, and brokerages to track the billions of dollars flowing in and out of stocks each day.

He’s used this system to survive nine bear markets… create three new indices for the Nasdaq… and even predict the brutal bear market of 2022, 90 days in advance.

Click to continue reading…

Insider Monkey Ads

Markets

Insider Trading

Hedge Funds

Retirement

Opinion

Log In

Sign Up