Growing Your Income With Dividend Stocks

This post is aimed at investors that seek common stocks likely to grow dividends at 7-12% over the long term. "What areas of the economy tend to offer the best combination of attractive payout ratios, high returns on reinvested earnings, and high returns on existing assets?" For me, the immediate answer is: Big Oil and Consumer Staples.

In the case of the large oil companies, the payout ratios are quite low (this is out of longstanding necessity so that if commodity prices fall, the capital expenditures and dividends may continue without a hitch). The other place to look for high dividend growth is the consumer staples and discretionaries such as Coca-Cola (KO), Pepsi (PEP), Colgate-Palmolive (CL), Hershey (HSY), Procter & Gamble (PG), and Johnson & Johnson (JNJ).

Source: Seeking Alpha

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