Looking to secure your retirement? Consider these seven top dividend growth stocks as a solid foundation. At Millionaire Mob, we emphasize increasing income through various channels, with dividend growth investing being one of our favorites. It requires less effort compared to focusing solely on long-term capital gains, and over time, you can accumulate a significant portfolio of dividend stocks that allow you to live comfortably on dividends alone. We have identified seven great dividend growth stocks suitable for securing a stress-free retirement based on our dividend discount model criteria.
Dividend growth investing is a fundamental strategy to attain financial independence. I personally enjoy finding quality dividend stocks at great prices. If you’re interested in creating a dividend growth portfolio, check out our detailed infographic for more insights.
Why choose dividend growth investing? We believe it provides a fantastic opportunity to accumulate wealth and generate income. Our comprehensive guide on dividend growth investing explains how to pair these stocks with a global dividend growth fund to achieve geographical diversification. In the U.S., many of these seven stocks are featured in various dividend growth funds. Building a dividend portfolio offers long-term benefits like consistent income and capital appreciation.
Here are our seven top dividend growth stocks for a secure retirement. Opting for reliable dividend growth stocks rather than volatile growth stocks with uncertain futures is a smart move. These stocks are not intended solely for retirement, but are chosen to help you secure your future retirement plans by providing value, growth, and residual income. Remember, compound interest works in your favor—building a dividend growth stock portfolio pays off over time.
Our selection process involves evaluating the potential of companies to grow their dividends, following a system like Eric Ervin’s DIVCON, which rates companies on their likelihood to increase or reduce their dividends. We used similar methods to identify undervalued dividend growth stocks you might find worth exploring for your portfolio.
Here are some of our favorite seven dividend growth stocks for a secure retirement, along with their annual dividend yields:
1. **Delta Airlines (DAL):** Delta Airlines is often misunderstood by investors, but with advancements in technology, they’ve found ways to operate efficiently. Dividends are expected to rise, and the stock is attractively priced.
– Annual Dividend Yield: 2.27%
– P/E Ratio: 10.90x
2. **Comcast Corporation (CMCSA):** Although many believe traditional cable is declining, Comcast’s investments in other media channels make it an interesting choice.
– Annual Dividend Yield: 1.89%
– P/E Ratio: 8.40x
3. **Aflac Incorporated (AFL):** Aflac stands to benefit from rising interest rates, allowing higher returns on their investments. The stock is valuably priced.
– Annual Dividend Yield: 2.43%
– P/E Ratio: 7.78x
4. **Union Pacific Corporation (UNP):** Known for its steady performance, Union Pacific is expected to continue rewarding shareholders.
– Annual Dividend Yield: 2.06%
– P/E Ratio: 9.55x
5. **Prudential Financial Inc. (PRU):** Like Aflac, Prudential is well-positioned to benefit from higher interest rates, with expectations of increasing EPS translating into dividends.
– Annual Dividend Yield: 2.70%
– P/E Ratio: 11.21
6. **CME Group Inc. (CME):** A leader in electronic financial exchanges, CME offers both capital growth and dividend growth, still below S&P 500’s average price.
– Annual Dividend Yield: 1.65%
– P/E Ratio: 13.40x
7. **Citizens Financial Group, Inc. (CFG):** This regional bank benefits from rising rates, with expected dividend increases.
– Annual Dividend Yield: 1.96%
– P/E Ratio: 13.73x
The above stocks have dividend payout ratios under 50%, providing a cushion against any earnings challenges. While their yields aren’t excessively high, they represent high-quality companies with strong brand recognition. You can complement your portfolio with higher-yielding REITs or MLPs for a boosted dividend yield. We’re keen on investing in undervalued dividend growth stocks.
Curious about our dividend discount model? Testing these companies with it might help you decide whether to include them in your portfolio. And if you need a guide on using the dividend discount model, we have resources available.
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What are your favorite dividend growth stocks for a secure retirement? Sticking with dividend stocks makes retiring on dividends possible. Let us know your thoughts in the comments.