For a dividend to grow, free cash flow must also grow. If not, there won’t be enough cash to pay or raise the dividend, and we like it when both things happen! Therefore to be a true “dividend growth stock” requires both free cash flow growth and dividend growth–that’s our definition. One without the other is unsustainable.
Looking at past performance in a range of five years, we have found and ranked this month’s universe of dividend stocks based on growth in both their Free Cash Flow and Dividend. Our method is simple, rank the cash flow growth with highest growth rate over five years being equal to a ranking of one, and sequentially assigning number two to the second highest, and so forth. We did the same for the dividend growth rate. We then added the rankings together to create a blend, which gave us the initial list. From there we eliminated any stocks that were not in our “Premier Status,” that is, they are not in the top percentiles of their business sector. Further, we eliminated any stocks that did not deliver a total return above the market’s long-term return of approximately 9%. For sustainability, we deleted the stocks with a dividend growth rate higher than the free cash flow rate.
From all of that we present to you . . .
The top 50 dividend growth stocks for 2021!
Key: [ FCF 5y annual growth rate | Dividend 5y annual growth rate | Total Return 5y annual rate ]
- (AIZ) Assurant Inc ~ Insurance [ 59.6 | 17.8 | 12.9 ]
- (HUM) Humana Inc ~ Healthcare Plans [ 47.6 | 18.2 | 18.6 ]
- (CE) Celanese Corp ~ Chemicals [ 40.3 | 21.3 | 15.8 ]
- (FMNB) Farmers National Banc Corp ~ Banks [ 32.1 | 28.7 | 11.4 ]
- (CTAS) Cintas Corp ~ Business Services [ 34.8 | 24.6 | 32 ]
- (FELE) Franklin Electric Co Inc ~ Industrial Products [ 46.4 | 9.7 | 21.5 ]
- (SPGI) S&P Global Inc ~ Capital Markets [ 40.7 | 14 | 28 ]
- (CSX) CSX Corp ~ Transportation [ 43.2 | 8.6 | 29.7 ]
- (AMAT) Applied Materials Inc ~ Semiconductors [ 28.7 | 20 | 36.8 ]
- (COST) Costco Wholesale Corp ~ Retail – Defensive [ 34.4 | 12.5 | 20.2 ] ♥
- (LII) Lennox International Inc ~ Industrial Products [ 24.6 | 20.8 | 18 ]
- (PRI) Primerica Inc ~ Insurance [ 23.2 | 20.9 | 24.2 ]
- (TXRH) Texas Roadhouse Inc ~ Restaurants [ 27.4 | 14.5 | 18.1 ]
- (FIX) Comfort Systems USA Inc ~ Construction [ 30.6 | 11.2 | 13.9 ]
- (BMI) Badger Meter Inc ~ Industrial Products [ 28.7 | 11.9 | 27 ]
- (TSCO) Tractor Supply Co ~ Retail – Cyclical [ 23 | 17.1 | 11.4 ]
- (WST) West Pharmaceutical Services Inc ~ Medical Devices & Instruments [ 30.6 | 8.3 | 36.6 ]
- (SRE) Sempra Energy ~ Utilities – Regulated [ 30.7 | 8.1 | 9.1 ]
- (FCNCA) First Citizens BancShares Inc ~ Banks [ 32.2 | 6 | 17.6 ]
- (FAF) First American Financial Corp ~ Insurance [ 22 | 15.6 | 10.6 ]
- (WAYN) Wayne Savings Bancshares Inc ~ Banks [ 19 | 18.4 | 12.9 ]
- (HWKN) Hawkins Inc ~ Chemicals [ 35.6 | 1.5 | 9.7 ]
- (CHE) Chemed Corp ~ Healthcare Providers & Services [ 29 | 8.1 | 29.2 ]
- (EVR) Evercore Inc ~ Capital Markets [ 19.5 | 17 | 17.1 ]
- (MRTN) Marten Transport Ltd ~ Transportation [ 18.7 | 16.3 | 21.2 ]
- (NUVR) Nuvera Communications Inc ~ Telecommunication Services [ 24.9 | 9.1 | 23.9 ]
- (FWRD) Forward Air Corp ~ Transportation [ 24.4 | 9 | 13.2 ]
- (UNP) Union Pacific Corp ~ Transportation [ 19.8 | 13.4 | 23.4 ]
- (SCI) Service Corp International ~ Personal Services [ 16.8 | 15.9 | 15 ]
- (MORN) Morningstar Inc ~ Capital Markets [ 22.7 | 9.9 | 24.1 ]
- (KLAC) KLA Corp ~ Semiconductors [ 20.9 | 11.4 | 31.5 ]
- (PKG) Packaging Corp of America ~ Packaging & Containers [ 18.3 | 13.4 | 19.3 ]
- (DFS) Discover Financial Services ~ Credit Services [ 18.9 | 12.5 | 12.8 ]
- (SHW) Sherwin-Williams Co ~ Chemicals [ 18 | 13.3 | 23.8 ] ♥
- (HSY) The Hershey Co ~ Consumer Packaged Goods [ 23.5 | 7.7 | 13.2 ]
- (FBMS) First Bancshares Inc ~ Banks [ 17.4 | 13.7 | 11.9 ]
- (ALL) Allstate Corp ~ Insurance [ 16.7 | 13.1 | 13.8 ]
- (UFPI) UFP Industries Inc ~ Forest Products [ 16 | 13.1 | 20.3 ]
- (NDSN) Nordson Corp ~ Industrial Products [ 15.6 | 11.7 | 26.5 ]
- (CSL) Carlisle Companies Inc ~ Construction [ 13.9 | 13.3 | 13.1 ]
- (MLM) Martin Marietta Materials Inc ~ Building Materials [ 21.9 | 5.1 | 16.5 ]
- (MKSI) MKS Instruments Inc ~ Hardware [ 22.4 | 4.3 | 33.8 ]
- (INDB) Independent Bank Corp ~ Banks [ 13.3 | 13 | 11.6 ]
- (GNTX) Gentex Corp ~ Vehicles & Parts [ 16.9 | 9.2 | 17.6 ]
- (PLD) Prologis Inc ~ REITs [ 16.6 | 9.3 | 20.6 ]
- (FAST) Fastenal Co ~ Industrial Distribution [ 13.9 | 11.4 | 21.1 ]
- (MSFT) Microsoft Corp ~ Software [ 15.3 | 10 | 33 ]
- (POWI) Power Integrations Inc ~ Semiconductors [ 14.6 | 9.8 | 28 ]
- (FFIN) First Financial Bankshares Inc ~ Banks [ 13.3 | 10.6 | 20.5 ]
- (MKC) McCormick & Co Inc ~ Consumer Packaged Goods [ 14.5 | 9.1 | 18.7 ] ♥
Download more details in PDF from DropBox by clicking this link.
What are your thoughts??
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Please Note: This information is not an offer to buy stocks, but just a list that has been narrowed down as starting point for your further research. We always recommend further due diligence before making your decision to invest or not.
‘+’ indicates upward direction of DivSys™ score for stocks with positive 10 year dividend growth rates, basically giving us enough years of performance to mathematically determine if they are doing better or doing worse over time.
‘♥’ indicates an all-time, reliable favorite well-suited for most portfolios.