If you read my blog for a longer time you should have noticed that dividend growth is one of the most important wealth drivers for long-term dividend investors.
I also talked about the difference between high dividend yields at a low growth and low yielding stocks with a high dividend growth.
The answer of this question is a between solution: Look at good initial yields with growing dividends over the longer period. I talk about mentionable yields and growth rates above the inflation level.
Today I would like to combine both, good growth with an acceptable initial dividend yield. In addition I love it to find stocks with low or no long-term debt. This increases the chance for further big dividend hikes or an accelerated growth.
Only a low leveraged company has more flexibility to grow sales and income much easier. Let’s take a look into the third dividend growth stock category - Dividend Challengers.
Thirteen stocks from the Dividend Challengers list (stocks with dividend growth between 5 to 10 consecutive years) fulfilled my above mentioned criteria. One stock has a high yield close to the double-digit yield ratio and five got a buy or better rating by brokerage firms. Most of the companies from the screening results are low capitalized; eight of them have a market capitalization under USD 2 billion.
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