The Internet holds a wealth of information to investors looking for dividend stocks. Considering the many web sites that publish articles on investing, it’s possible that every single stock has been blogged about.
But now and again, it’s reasonable to wonder if those who publish articles about dividend stocks, eat their own cooking, so to speak.
Rest assured, that many dividend stock bloggers own many of the same stocks they write about.
According to a site called Dividend Growth Center, the following 10 stocks are the most widely-held dividend stocks among dividend bloggers. In total, 78 dividend growth blogger portfolios are analyzed.
The advantage of looking at the most widely held dividend growth stocks is you can ‘borrow’ the consensus ideas of other avid dividend growth investors.
Interestingly, 7 of the 10 most popular dividend growth stocks are Dividend Aristocrats. The Dividend Aristocrats Index is a group of 50 stocks with 25+ consecutive years of dividend increases (the index has a history of beating the S&P 500 as well). You can see the full list of Dividend Aristocrats here.
Without further ado, the 10 most widely held dividend growth stocks by dividend growth bloggers are analyzed in detail below.
10. Unilever PLC (UL)
First up is consumer products giant Unilever, which is based in the U.K. Unilever has been in business since 1885.
Today, Unilever has a high-quality product portfolio. It has 13 individual brands that each bring in $1 billion or more in annual revenue. A few of its flagship brands include Dove, Hellman’s, Lipton, and Knorr.
Unilever derives nearly half of its annual sales from food, and the other half from beverages. Its diversified product portfolio has led to great performance for the company.
Unilever’s sales and earnings increased 10% and 14%, respectively, in 2015.
It has continued to post strong results over the course of 2016. Revenue rose 4.2% through the first nine months of 2016. Growth was driven by both pricing and volumes, which increased 2.8% and 1.3%, respectively.
Unilever has turned in significantly higher growth than many of its peers in the consumer goods sector throughout 2016.
Source: Q3 Earnings Presentation, page 5
Dividend Growth Stocks
Part of the reason for this is because the company runs a streamlined business model that focuses on a select group of high-growth opportunities.
Another reason for Unilever’s strong growth rates is because the company has invested heavily in high-growth economies. More than half the company’s annual revenue comes from emerging markets.
Unilever’s emerging market revenue increased 7.2% through the first three quarters.
The focus on higher-growth categories and the emerging markets is readily apparent, especially when it comes to Unilever’s food business.
Source: Investor Presentation, page 2
The company has many category-leading brands, which provide Unilever with significant pricing power. All four of its core categories saw pricing increases over the first nine months of the year, which helps boost revenue growth.
Unilever’s strong brands and above-average growth support its hefty 3.5% dividend yield.
9. Procter & Gamble (PG)
Next up is another consumer products giant, Procter & Gamble. It should come as no surprise to see two consumer goods stocks start off the list.
Consumer products companies like P&G enjoy a strong fundamental tailwind, in that their products are used each day by millions of people around the world.
Like Unilever, P&G sells products that people cannot do without. Many of P&G’s biggest categories, such as razor blades, toothpaste, and paper towels, need to be purchased, regardless of the overall economic climate.
This helps provide P&G with a defensive business model that insulates the company against recessions. In turn, P&G has a 3.1% dividend yield and has raised its dividend for an amazing 60 years in a row.
P&G is a Dividend King – a select group of stocks with 50+ consecutive years of dividend increases. You can see all 18 Dividend Kings analyzed here.
And, like Unilever, P&G is focusing on a smaller brand portfolio going forward. The company is undergoing a massive transformation.
P&G has unloaded dozens of brands over the past year, including the sale of 43 beauty brands to Coty (COTY) for $12 billion. P&G also sold the Duracell battery business to Warren Buffett’s Berkshire Hathaway (BRK.B).
While many of the brands P&G divested are profitable, they were not growing.
Once all is said and done, P&G intends to slim down to the following core categories and associated brands:
- Fabric Care (Tide, Gain, Downy)
- Home Care (Febreze, Swiffer, Mr. Clean, Dawn)
- Grooming (Gillette, Venus)
- Oral Care (Crest, Oral-B, Fixodent)
- Baby Care (Pampers, Luvs)
The strategy seems to be working, as P&G’s fiscal 2017 first quarter organic sales growth exceeded its growth rate throughout fiscal 2016.
Source: Analyst Meeting presentation, page 5
Accelerating revenue growth is expected to fuel mid-single digit core earnings growth in fiscal 2017.
Source: Analyst Meeting presentation, page 13
This would be great news for P&G investors, as higher earnings growth would enable the company to accelerate its dividend growth as well.
8. General Electric (GE)
Next up is industrial giant GE. GE is a natural choice for income investors, as the stock has a solid 3% dividend yield.
In addition, GE could be a play on global economic growth as well. GE is one of the largest companies in the world, with a $278 billion market cap.
And, it has a presence in nearly every industry. This is why GE is widely viewed as a bellwether for global economic growth.
Now that GE plans to divest its massive financial arm GE Capital, it will focus entirely on its industrial core. This should provide smoother growth, since GE’s financial business was extremely volatile over the past several years, particularly during the Great Recession.
This is likely the right direction to take the company. Over the first nine months of 2016, GE’s revenue excluding GE Capital rose 17% year over year. Including GE Capital, GE’s overall revenue increased just 9% in that period.
Going forward, GE’s future growth will be fueled by acquisitions. The company has conducted two separate deals which could be truly transformational.
First, GE acquired the power and grid businesses from Alstom (ALSMY) for $10 billion in 2015. The assets obtained from Alstom should be accretive to GE immediately.
Source: GE Annual Outlook Investor Meeting, page 9
In addition, GE made another smart deal when it acquired Baker Hughes. GE will own a 62% in the merged entity, which will be publicly-traded.
Source: GE Annual Outlook Investor Meeting, page 8
Like the Alstom acquisition, Baker Hughes is expected to immediately add to GE’s earnings.
In 2017 and 2018, GE expects to grow organic revenue by 3%-5% per year, and to expand profit margin by 100 basis points each year.
Due to the combination