Go Beyond Yield and Consistency, Go for Growth

For conservative, income-minded investors, there are two metrics that jump out instantaneously when evaluating securities: the company’s track record of making distributions, measured by consecutive years of increases, and the size of the distribution itself, measured by the dividend yield. However, there’s more to successful dividend investing than going after firms with an impressive track record of dividend increases or a juicy yield. For young investors especially, the one metric that is all too often overlooked, and wrongfully so, is the dividend growth rate of a security.

In other words, we’re looking at stocks that boast very impressive track records with regards to both consistency and dividend growth. Here are some to consider: Helmerich Payne (HP), Target (TGT), Donaldson Company (DCI) and Walgreens Boots Alliance, Inc. (WBA). t’s important to consider several metrics before pulling the trigger on what appears to be a solid dividend-paying company. Look under the hood and make sure its dividend growth rate aligns with your objectives. Generally speaking, younger investors should opt for higher-growth stocks since they have a higher risk tolerance and time on their side.

Source: Dividend.com

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