Stocks to Invest In for Dividend Growth

Dividend investors are always on the lookout for stocks to invest in that will provide them with the income they need to meet their financial needs. Lately, though, fears about whether dividend stocks have gotten overvalued has made many would-be dividend investors leery of adding new names to their portfolios. When you're looking for the ideal dividend stocks to invest in, you need to focus on three main things.

First, the stock's current dividend yield will tell you how much income you can expect right now. Second, looking at the stock's history of dividend increases will give you hints as to the possible future growth of that income. And finally, examining how the dividend compares to earnings and free cash flow will reveal whether the current dividend is sustainable, both now and in the long run. For a good mix of positive dividend attributes, the following stocks offer a compelling combination of low payout ratios, long dividend histories, and attractive yields: Chevron (NYSE: CVX), PepsiCo (NYSE: PEP) and Kimberly-Clark (NYSE: KMB).

Source: Motley Fool

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