Best Dividend Stocks for Reliable Growth

Income investors know there's no substitute for regular dividend increases over the long haul. In this report, we highlight a selection of blue-chip stocks with a proven track record of sustainable dividend growth.

What Makes a Good Dividend Stock?

A good dividend stock consistently raises its payout year after year, providing growing income for investors. The company should also be financially strong with sufficient free cash flow to support increases.

Top Stocks Selected

• IBM: Technology sector, dividend yield over 4%, with a long history of annual increases.
• Johnson & Johnson (JNJ): Healthcare sector, yield around 3%, with 60 consecutive years of increases.
• Walmart (WMT): Consumer defensive, yield around 1.5%, with steady dividend growth.
• Procter & Gamble (PG): Consumer defensive, yield around 2.5%, with a strong record of increases.
• Coca-Cola (KO): Consumer defensive, yield around 3%, with 60 years of increases.
• PepsiCo (PEP): Consumer defensive, yield around 2.8%, with robust dividend growth.
• Lowe's (LOW): Consumer cyclical, yield around 2%, with regular increases.
• Target (TGT): Consumer defensive, yield around 2.5%, with a good track record.
• Caterpillar (CAT): Industrials, yield around 2%, with dividend growth.
• Exxon Mobil (XOM): Energy, yield around 4%, with a recent increase.
• Chevron (CVX): Energy, yield around 4%, with a history of increases.

How to Choose a Dividend Stock?

Look for companies with sustainable competitive advantages, a reasonable payout ratio (below 80%), and a history of annual increases. Also monitor free cash flow and debt levels.

What This Means for Investors

These stocks provide growing income and a hedge against inflation. However, diversification is key. New investors can start buying these stocks through low-cost brokerage accounts.