We searched for dividend paying stocks that have increased their total returns over 15-, 10-, 5-, and 3-year periods. We found 15 stocks that deliver index-beating perfomance and maximum total returns!
The top stock is Arthur J. Gallagher (AJG) working in the financials / insurance sector. AJG’s total return averages 22.4% per year over a 15-year period! In the last 3-year period the total return was 27.18% per year. With performance like this we are not surprised it’s selling above fair value and a pricey PE ratio of 34.6! AJG has increased dividends continuously for over 37 years. Keep this stock in your watch list and buy on the dips.
The Forest and the Trees
The stock currently offering the greatest value is UFP Industries (UFP), a wood and wood product manufacturer. Over the last 15 years, UFP’s total return has averaged 20.99% per year, while dividend growth has averaged 17.5% per year; surprisingly with all of this growth, the PE ratio is low at 7.0. and Current dividend yield is above historical yield (indicating value); PE is below historical average, also indicating value. UFP has increased dividends for the last 25 years. “Wood” you add it to your portfolio?
If you’re looking to put more style into your everyday life, consider Williams-Sonoma (WSM), the omnichannel retailer and owner of Pottery Barn, West Elm, and of course Williams-Sonoma, the high end kitchen ware store. WSM has increased its dividend for over 15 years, currently yielding 2.53% (the highest in this list), delivering a total return of 14.5% per year over the last ten years. The PE ratio is well below the historical average (indicating value) and the dividend yield is above its historical average (also indicating value.) The forward dividend coverage ratio is high at 4.26, meaning a cut is unlikely. Cash flow tumbled in the past year (as with most retailers) as the urge to travel diverted “household” funds. But things will get back to normal soon-ish and WSM will continue to benefit from owning preferred brands for years to come. Are you considering adding a little style to your portfolio with WSM?
The 21 dividend paying stocks on this list average 27.8 years of continuous dividend increases, an average 5-year total return of 18.8% per year, free cash flow growth of 15.6% per year, and dividend growth of 8.76% per year, low payout ratios. They truly will be shining stars in portfolios!
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