Finding Growth and Income

We didn’t think it would be difficult to find dividend stocks that offer both current income and potential growth. Yes, we were wrong! It took a bit of thinking (hard) and digging (programming) to come up with this shortlist of candidates.

Our criteria for the search was based on traditional dividend metrics:

  • Payout ratio lower than 1.4 (so as to possibly include REITS)
  • Debt-to-Equity ratio lower than 1
  • Forward dividend free cash flow coverage ratio (our own invention) greater than 2.0
  • 10 year growth rating (our own formula based rating) greater than or equal to 3.0
  • Income rating (again, our own formula) greater than or equal to 3.0
  • Reliability rating greater than or equal to 3.0
  • Market capitalization greater than $500 million
  • Yield greater than the S&P 500’s yield, currently at 1.56%

After all of that was plugged into our system, and out of 773 stocks in our dividend universe (stocks that have increased their dividends for seven years minimum), we found seven (7) dividend stocks that met the criteria. Every single one of the stocks that met our requirements are in the financial services sector, mostly banks.

Top Growth and Income Dividend Stocks for February 2021

Key: [ FCF 5y annual growth rate | Dividend 5y annual growth rate | Total Return 5y annual rate ]

(BMTC) Bryn Mawr Bank Corp ~ Banks [ 11.7 | 6.5 | 8.8 ]

(CATC) Cambridge Bancorp ~ Banks [ 11 | 3.6 | 13.3 ]

(CBOE) Cboe Global Markets Inc ~ Capital Markets [ 18.3 | 10.9 | 10.4 ]

(CHCO) City Holding Co ~ Banks [ 11.6 | 6 | 13.7 ]

(FAF) First American Financial Corp ~ Insurance [ 22 | 15.6 | 12.6 ]

(HBNC) Horizon Bancorp (IN) ~ Banks [ 39.3 | 15.5 | 12.6 ]

(TCBK) TriCo Bancshares ~ Banks [ 18.1 | 12.4 | 11.7 ]

We like HorizonBancorp (HBNC) as it’s free cash flow is growing more than the dividend, has a good total return of 12.6%, a current yield of 2.8%, and is a Dividend Aristocrat with 29 years of increasing dividends.

What’s your choice? We’d love to hear your thoughts!


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.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Powered by

Up ↑

%d bloggers like this: