The ten S&P 500 companies that have increased their dividend payout by the highest average annual rate during the last five years are analyzed in this article. The goal is to find out if they can continue their high dividend growth rate.
Since this article is designated to income-oriented investors, I have considered only stocks that are yielding more than 2.5%. The tables below show the top ten S&P 500 companies based on 5 year dividend growth, as well as each one’s:
– Dividend yield
– Payout ratio
– Average annual dividend growth rates during the last five and three years
Data: Portfolio123 (05/01/2016)
When a company has a long-term track record of consistent and rising dividend payments, it is a clear indicator that the company’s financial position is good.
Investing in companies that regularly raise dividends provides security in an uncertain market and means higher returns ahead.
I consider that besides dividend yield, the consistency and the rate of raising dividend payments are the most crucial factors for dividend-seeking investors.
Peter Lynch, the legendary manager of the Fidelity Magellan Fund, wrote in his book “Beating the Street”:
“The Dividend Achievers Handbook is one of my favorite bedside thrillers. Here’s a simple way to succeed in Wall Street: Buy the stocks on Mergent’s list and stick with them as long as they stay on the list.”
Dividend Achievers are stocks with 10+ consecutive years of dividend increases. Click here to see a list of all Dividend Achievers.
Seagate Technology PLC (NASDAQ:STX)
Seagate Technology PLC (NASDAQ:STX) designs, manufactures, and sells electronic data storage products. The company offers hard disk drives, solid state hybrid drives, and solid state drives, which are designed for enterprise servers, mainframes, and workstations; for desktop and notebook computers; and for various end user devices, such as digital video recorders, gaming consoles, personal data backup systems, portable external storage systems, and digital media systems. The company was founded in 1979 and is headquartered in Dublin, Ireland.
Image Source: Seagate Technology