One of the advantages of being a dividend investor is that I invest in businesses that meet a certain qualitative and quantitative criteria. This allows me to focus on quality compounding machines with established track records. This discipline also allows me to avoid overpaying for those companies. Even the best company in the world is not worth overpaying for. The third trait I have is patience – I am willing to sit on a stock for years, which reduces transaction costs and lets me take advantage of the maximum power of long-term compounding.

Quality Dividend Growth Stocks
Photo by stevepb (Pixabay)
Quality Dividend Growth Stocks

While everyone is complaining that the stock market is “high”, I went ahead and started looking for companies that are attractively valued today. I think that the following companies are worthy of being considered for your further research. The companies include:

Medtronic plc (MDT) manufactures and sells device-based medical therapies worldwide. This dividend champion has increased distributions for 39 years in a row. Over the past decade, Medtronic has raised its annual dividend at a rate of 14.30%/year. Currently, the stock is selling at 15.60 times forward earnings and yields 2.40%.

The J. M. Smucker Company (SJM) manufactures and markets branded food and beverage products worldwide. It operates through U.S. Retail Coffee, U.S. Retail Consumer Foods, U.S. Retail Pet Foods, and International and Foodservice segments. This dividend achiever has increased distributions for 19 years in a row. Over the past decade, J. M. Smucker has raised its annual dividend at a rate of 9.50%/year. Currently, the stock is selling at 16.60 times forward earnings and yields 2.30%. Check my analysis of the company for more information.

Aflac Incorporated (AFL) provides supplemental health and life insurance products. It operates through two segments, Aflac Japan and Aflac U.S. This dividend champion has increased distributions for 34 years in a row. Over the past decade, Aflac has raised its annual dividend at a rate of 13.60%/year. Currently, the stock is selling at 10.10 times forward earnings and yields 2.50%.

General Dynamics Corporation (GD) operates as an aerospace and defense company worldwide. It operates through four business groups: Aerospace; Combat Systems; Information Systems and Technology; and Marine Systems. This dividend champion has increased distributions for 25 years in a row. Over the past decade, General Dynamics has raised its annual dividend at a rate of 13.20%/year. Currently, the stock is selling at 17.60 times forward earnings and yields 1.80%.

Johnson & Johnson (JNJ) researches and develops, manufactures, and sells various products in the health care field worldwide. It operates through three segments: Consumer, Pharmaceutical, and Medical Devices. This dividend king has increased distributions for 54 years in a row. Over the past decade, Johnson & Johnson has raised its annual dividend at a rate of 8.80%/year. Currently, the stock is selling at 17.20 times forward earnings and yields 2.80%.Check my analysis of the company for more information.

V.F. Corporation (VFC) engages in the design, production, procurement, marketing, and distribution of branded lifestyle apparel, footwear, and related products in the United States and Europe. This dividend champion has increased distributions for 44 years in a row. Over the past decade, V.F. Corporation has raised its annual dividend at a rate of 17.10%/year. Currently, the stock is selling at 17 times forward earnings and yields 3.10%.

Hormel Foods Corporation (HRL) produces and markets various meat and food products worldwide. The company operates in five segments: Grocery Products, Refrigerated Foods, Jennie-O Turkey Store, Specialty Foods, and International & Other. This dividend king has increased distributions for 51 years in a row. Over the past decade, Hormel Foods has raised its annual dividend at a rate of 14.40%/year. Currently, the stock is selling at 20.50 times forward earnings and yields 1.90%. I am considering initiating a position in Hormel on dips below $34/share.

Walgreens Boots Alliance, Inc. (WBA) operates as a pharmacy-led health and wellbeing company. It operates through three segments: Retail Pharmacy USA, Retail Pharmacy International, and Pharmaceutical Wholesale. This dividend champion has increased distributions for 41 years in a row. Over the past decade, Walgreens Boots Alliance has raised its annual dividend at a rate of 19.50%/year. Currently, the stock is selling at 16.50 times forward earnings and yields 1.80%. Check my analysis of the company for more information.

Becton, Dickinson and Company (BDX) develops, manufactures, and sells medical supplies, devices, laboratory equipment, and diagnostic products worldwide. It operates in two segments, BD Medical and BD Life Sciences. This dividend champion has increased distributions for years in a row. Over the past decade, Becton Dickinson has raised its annual dividend at a rate of 13.10%/year. Currently, the stock is selling at 17.40 times forward earnings and yields 1.80%. Check my stock analysis for more information.

T. Rowe Price Group, Inc. (TROW) is a publicly owned investment manager. The firm provides its services to individuals, institutional investors, retirement plans, financial intermediaries, and institutions. This dividend champion has increased distributions for 30 years in a row. Over the past decade, T. Rowe Price Group has raised its annual dividend at a rate of 6.30%/year. Currently, the stock is selling at 17.20 times forward earnings and yields 2.90%. Check my analysis of the company for more information.

S&P Global, Inc. (SPGI) provides independent ratings, benchmarks, analytics, and data to the capital and commodity markets worldwide. The company operates through S&P Global Ratings, S&P Global Market Intelligence, S&P Dow Jones Indices, and S&P Global Platts divisions. This dividend champion has increased distributions for 43 years in a row. Over the past decade, S&P Global has managed to boost its annual dividend at a rate of 7.20%/year. Currently, the stock is selling at 20.40 times forward earnings and yields 1.30%. I would consider initiating a position in the stock on dips below $105- $106/share.

United Technologies Corporation (UTX) provides technology products and services to building systems and aerospace industries worldwide. This dividend achiever has increased distributions for 23 years in a row. Over the past decade, United Technologies has hiked its annual dividend at a rate of 8.50%/year. Currently, the stock is selling at 16.60 times forward earnings and yields 2.40%. Check my analysis of the company for more information.

Verizon Communications Inc. (VZ), through its subsidiaries, provides communications, information, and entertainment products and services to consumers, businesses, and governmental agencies worldwide. This dividend achiever has increased distributions for 12 years in a row. Over the past decade, Verizon managed to raise its annual dividend at a rate of 3.30%/year. Currently, the stock is selling at 13.70 times forward earnings and yields 4.30%. See my analysis of the company for more information.

Pentair plc (PNR) operates as a diversified industrial manufacturing company in the United States, Europe, and internationally. The company operates through Valves & Controls, Technical Solutions, Flow & Filtration Solutions, and Water Quality Systems segments. This dividend champion has increased distributions for 40 years in a row. Over the past decade, Pentair has managed to boost its annual dividend at a rate of 9.40%/year. Currently, the stock is selling at 18.50 times forward earnings and yields 2.50%. I need to add this stock to my list for further research.

Lowe’s Companies, Inc. (LOW) operates as a home improvement retailer. It offers products for home maintenance, repair, remodeling, and decorating. This dividend king has increased distributions for 54 years in a row. Over the past decade, Lowe’s has managed to boost its annual dividend at a rate of 26.10%/year. Currently, the stock is selling at 18.10 times forward earnings and yields 2%.

Kimberly-Clark Corporation (KMB) manufactures and markets personal care, consumer tissue, and professional products worldwide. This dividend champion has increased distributions for 44 years in a row. Over the past decade, Kimberly-Clark has managed to boost its annual dividend at a rate of 7.60%/year. Currently, the stock is selling at 19 times forward earnings and yields 3.20%.

Target Corporation (TGT) operates as a general merchandise retailer. This dividend champion has increased distributions for 54 years in a row. Over the past decade, Target has managed to boost its annual dividend at a rate of 19.60%/year. Currently, the stock is selling at 13.90 times forward earnings and yields 3.30%. Check my analysis of Target for more information.

As usual, this list is just a starting point for your further research. In order to be successful, you need to build a diversified portfolio that consists of at least 50 – 60 individual stocks representative from as many sectors that make sense. Building that portfolio over time helps immensely. Filling that portfolio with quality dividend growth stocks purchased over time is equally as important. Monitoring this portfolio is important, but letting it patiently compound quietly for decades may be even more important.

Full Disclosure: Long MDT, SJM, AFL, GD,  JNJ, VFC, WBA, TROW, UTX, VZ, LOW, KMB, TGT

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Article by Dividend Growth Investor