Top Dividend Growth Stocks To Consider For Investment

Investors are advised to consider three strong dividend growth stocks highlighted in a recent report. Companies like Chevron, Snap-On, and Union Pacific show promising histories and attractive valuations, making them potentially beneficial for long-term investment strategies focused on steady dividend payouts.

Date: 02-10-2024

AI Rating: 7

The report highlights three companies—Chevron, Snap-On, and Union Pacific—known for their strong dividend growth, making them appealing choices for long-term investors. Each company exhibits unique attributes supporting their capacity to maintain and grow dividends over time.

1. Chevron (CVX)

Chevron is noted for its consistent dividend growth over 37 consecutive years, reflecting its ability to withstand fluctuations in the oil and gas industry. The report highlights that the dividend is currently only 60% of estimated 2024 earnings, indicating a sound profit margin and a healthy balance sheet, as evident from its AA- credit rating. Additionally, as interest rates fall, the existing 4.4% yield can become more attractive, potentially increasing demand for its shares.

2. Snap-On (SNA)

Snap-On has raised its dividend payout for 15 consecutive years with an average hike of nearly 15% in the last five years, showing a strong commitment to returning value to shareholders. The dividend payout ratio remains below 40% of estimated 2024 earnings, which supports the potential for sustained dividend growth. With a current yield of 2.6% and a reasonable valuation at 15 times earnings, this stock is well-positioned for growth.

3. Union Pacific (UNP)

Union Pacific has maintained its dividend for 17 years, yielding 2.2%. The payout ratio at 48% of estimated 2024 earnings, along with a projected growth rate of almost 10% annually, supports the stock's viability as a dividend growth candidate. Furthermore, its A- credit rating provides stability and confidence to investors looking for long-term growth.

In summary, all three stocks possess strong operating metrics, sound financial health, and a history of increasing their dividends, which positions them well for long-term investment strategies focused on dividend growth.

Stocks: CVX SNA UNP