Up to date on June 14th, 2023 by Bob Ciura

Revenue traders are inclined to deal with shares with the best dividend yields. However dividend progress can also be an necessary consideration when developing an revenue portfolio.

Whereas high-yield shares are interesting for the revenue they supply within the short-term, one of the best dividend progress shares are equally interesting as a result of potential for even larger dividend revenue over the long term.

For instance, the Dividend Aristocrats are among the many greatest dividend progress shares. The Dividend Aristocrats symbolize 68 corporations within the S&P 500 Index, which have every raised their dividends for not less than 25 consecutive years.

You possibly can obtain an Excel spreadsheet of all 68 (with metrics that matter) by clicking the hyperlink beneath:

 

The Dividend Aristocrats are extensively considered among the many greatest dividend progress shares. However they didn’t begin out as Dividend Aristocrats.

It is usually helpful for traders to contemplate a number of the greatest dividend progress shares that won’t have as lengthy of a dividend historical past proper now, however have the potential to develop into the subsequent Dividend Aristocrats.

Traders ought to deal with high-quality corporations with sturdy aggressive benefits, constant progress, and the flexibility to boost their dividends over the long run.

These greatest dividend progress shares aren’t all on the checklist of Dividend Aristocrats. However in any case, they’ve the potential to boost their dividends at a excessive fee annually, and maybe be among the many future Dividend Aristocrats.

Desk Of Contents

The highest 12 greatest dividend progress shares checklist is comprised of shares with dividend yields at or above the S&P 500 common (at the moment 1.6%), in addition to Dividend Danger scores of ‘C’ or higher.

Lastly, all 12 shares have optimistic anticipated EPS progress of not less than 10% per 12 months, making them extra more likely to exhibit larger dividend progress charges.

One of the best dividend progress shares are listed by 5-year anticipated whole returns within the Certain Evaluation Analysis Database, so as of lowest to highest.

You possibly can immediately soar to a selected inventory by clicking on the hyperlinks beneath:

Dividend Development Inventory #12: Starbucks Corp. (SBUX)

Starbucks has greater than 36,000 shops worldwide. About half of the shops are within the U.S., and almost 20% of the shops are in China. The corporate operates below the namesake Starbucks model but in addition holds the Teavana, Evolution Recent, and Ethos Water manufacturers in its portfolio. The corporate generated $32 billion in annual income in fiscal 2022.

In early Could, Starbucks reported (5/2/23) monetary outcomes for the second quarter of fiscal 12 months 2023. The corporate loved accelerated enterprise momentum and grew its comparable retailer gross sales 11% because of 12% progress within the U.S. and seven% progress in worldwide markets.

Supply: Investor Presentation

Adjusted earnings-per-share grew 25%, from $0.59 within the prior 12 months’s quarter to $0.74, and exceeded the analysts’ consensus by $0.09. The headwinds from the lockdowns in China and excessive inflation have subsided. Starbucks reiterated its optimistic steering for 2023, anticipating progress of earnings-per-share on the low finish of its long-term steering of 15%-20% progress.

Starbucks is among the many greatest dividend progress shares resulting from its world-class model and lengthy historical past of progress.

Click on right here to obtain our most up-to-date Certain Evaluation report on Starbucks Company (SBUX) (preview of web page 1 of three proven beneath):

Dividend Development Inventory #11: Yum Manufacturers (YUM)

Yum Manufacturers owns the KFC, Pizza Hut, Taco Bell, and The Behavior Eating places chains. It’s current in additional than 155 nations and has greater than 54,000 eating places, 60% of that are situated overseas. KFC generates about half of the entire income and working revenue of the corporate.

In early Could, Yum Manufacturers reported (5/3/23) monetary outcomes for the primary quarter of 2023.

Supply: Investor Presentation

The corporate grew its currency-neutral gross sales 11% over the prior 12 months’s quarter thanks to eight% same-store gross sales progress and three% progress of retailer depend. KFC, Taco Bell, and Pizza Hut grew their gross sales 11%, 12% and 10%, respectively.

Click on right here to obtain our most up-to-date Certain Evaluation report on Yum Manufacturers (preview of web page 1 of three proven beneath):

Dividend Development Inventory #10: Horace Mann Educators Corp. (HMN)

Horace Mann Educators Company was based in 1945 by two academics from Springfield, Illinois, who acknowledged the necessity for high quality and inexpensive auto insurance coverage for academics. At the moment, the corporate is the biggest monetary providers supplier that focuses on serving the schooling neighborhood and those that serve the neighborhood. The corporate’s main clients are educators, however it additionally serves people and organizations within the public sector.

Supply: Investor Presentation

Horace Mann gives a variety of monetary and insurance coverage merchandise, together with retirement annuities, life insurance coverage, and property and casualty insurance coverage. The corporate has a powerful market presence and is taken into account a pacesetter within the schooling insurance coverage market. Total, Horace Mann Educators Company has a long-standing popularity for serving the schooling neighborhood and has a major market share within the Ok-12 schooling market.

Click on right here to obtain our most up-to-date Certain Evaluation report on HMN (preview of web page 1 of three proven beneath):

Dividend Development Inventory #9: RB International (RBA)

Ritchie Bros. gives end-to-end options for purchasing and promoting used heavy tools, vehicles, and different property. The corporate’s main promoting channels embody Ritchie Bros. Auctioneers, the world’s largest industrial auctioneer that includes on-line bidding, IronPlanet, an internet market with weekly auctions, and IronClad Assurance, which supplies tools situation certification. The corporate generates round $1.7 billion in annual revenues, and is predicated in Burnaby, Canada.

Supply: Investor Presentation

On Could tenth, 2023, Ritchie Bros. reported its Q1 outcomes for the interval ending March thirty first, 2023. For the quarter, revenues rose 30.1% year-over-year to $512.4 million. This was resulting from whole service revenues and stock gross sales revenues growing by 40% and 13% to $343.6 and $168.8, respectively. Whole income progress contains $80 million from the affect of the acquisition of IAA.

Click on right here to obtain our most up-to-date Certain Evaluation report on RB International (preview of web page 1 of three proven beneath):

Dividend Development Inventory #8: Dwelling Bancshares Inc. (HOMB)

Dwelling Bancshares is a financial institution holding firm. Prospects in Arkansas, Florida, Alabama, and New York can entry quite a lot of monetary providers by way of Centennial Financial institution, the corporate’s most important subsidiary. Greater than 300,000 customers are served by the corporate’s greater than 222 department websites.

Dwelling Bancshares holds a aggressive place within the banking sector and locations a excessive precedence on providing wonderful consumer care and inventive monetary options. The enterprise derives revenue from a number of markets, together with business loans, residential loans, client loans, and deposit accounts, and has a market share of about 1% within the US banking trade.

Click on right here to obtain our most up-to-date Certain Evaluation report on Dwelling Bancshares (HOMB) (preview of web page 1 of three proven beneath):

Dividend Development Inventory #7: NextEra Power Companions (NEP)

NextEra Power Companions was fashioned in 2014 as Delaware Restricted Partnership by NextEra Power to personal, function, and purchase contracted clear power initiatives with secure, long-term money flows. The corporate’s technique is to capitalize on the power trade’s favorable traits in North America of unpolluted power initiatives changing uneconomic initiatives.

NextEra Power Companions operates 34 contracted renewable technology property consisting of wind and photo voltaic initiatives in 12 states throughout america. The corporate additionally operates contracted pure fuel pipelines in Texas which accounts for a few fifth of NextEra Power Companions’ revenue.

Supply: Investor Presentation

On April twenty fifth, 2023, NextEra Power, Inc. posted its first-quarter monetary outcomes. NextEra Power Companions reported Q1 GAAP EPS of -$0.17, lacking expectations by $0.61, whereas income of $301M missed expectations by $54.92M. The corporate expects 12-15% progress per 12 months in restricted companion distributions per unit by way of not less than 2026 and anticipates a This autumn 2023 annualized distribution fee of $3.64 to $3.74 per widespread unit.

Click on right here to obtain our most up-to-date Certain Evaluation report on NextEra Companions (NEP) (preview of web page 1 of three proven beneath):

Dividend Development Inventory #6: Goal Corp. (TGT)

Goal is a big low cost retailer. Its enterprise consists of about 1,850 massive field shops, which provide normal merchandise and meals, in addition to serving as distribution factors for the corporate’s burgeoning e-commerce enterprise. Goal ought to produce about $110 billion in whole income this 12 months.

Goal posted first quarter earnings on Could seventeenth, 2023, and outcomes had been higher than anticipated on each the highest and
backside strains. Adjusted earnings-per-share got here to $2.05, which was 29 cents higher than anticipated. Income was up
fractionally year-over-year to $25.3 billion, beating estimates by $40 million.

Click on right here to obtain our most up-to-date Certain Evaluation report on Goal (TGT) (preview of web page 1 of three proven beneath):

Dividend Development Inventory #5: Magna Worldwide Inc. (MGA)

Magna Worldwide is the biggest automotive provider in North America and the fourth-largest on the planet. Magna has elevated its dividend yearly since 2010.

Magna reported its Q1 2023 outcomes on 05/05/2023. For the quarter, its international gentle car manufacturing elevated by 3% vs Q1 2022. As nicely, its gross sales of $10,673 million was a rise of 11% 12 months over 12 months. Revenue from operations earlier than revenue taxes fell 35% to $275 million. Consequently, internet revenue declined 43% to $209 million.

Adjusted diluted earnings-per-share (“EPS”) of $1.11 was a decline of 13% 12 months over 12 months. This decline is rather more palatable than the leads to This autumn 2022.

Click on right here to obtain our most up-to-date Certain Evaluation report on Magna Worldwide (MGA) (preview of web page 1 of three proven beneath):

Dividend Development Inventory #4: Cigna Group (CI)

Cigna is a number one supplier of insurance coverage services and products. The corporate’s merchandise embody dental, medical, incapacity and life insurance coverage that it supplies by way of employer-sponsored, government-sponsored and particular person protection plans.

Supply: Investor Presentation

On Could fifth, 2023, Cigna reported first quarter outcomes for the interval ending March thirty first, 2023. For the quarter, income grew 5.6% to $46.5 billion, which was $1.05 billion greater than anticipated. Adjusted earnings-per-share of $5.41 in comparison with adjusted earnings-per-share of $6.01 within the prior 12 months, however was $0.17 above estimates.

Click on right here to obtain our most up-to-date Certain Evaluation report on Cigna (preview of web page 1 of three proven beneath):

Dividend Development Inventory #3: Dominos Pizza (DPZ)

Domino’s Pizza is the biggest pizza firm on the planet based mostly on international retail gross sales. The corporate operates greater than 20,000 shops in additional than 90 nations. It generates almost half of its gross sales within the U.S. whereas 99% of its shops worldwide are owned by impartial franchisees.

In late April, Domino’s reported (4/27/23) monetary outcomes for the primary quarter of fiscal 2023. Its worldwide identical retailer gross sales grew 1.2% over the prior 12 months’s quarter and its U.S. same-store gross sales grew 3.6%, principally thanks to cost hikes. Earnings-per-share grew 17%, from $2.50 to $2.93, and exceeded the analysts’ consensus by $0.21 thanks to cost hikes, the opening of latest shops and share repurchases.

Click on right here to obtain our most up-to-date Certain Evaluation report on Dominos Pizza (DPZ) (preview of web page 1 of three proven beneath):

Dividend Development Inventory #2: Hannon Armstrong Sustainable Infrastructure (HASI)

Hannon Armstrong Sustainable Infrastructure Capital, Inc. is an organization that’s targeted on offering capital for companies within the power effectivity, renewable power, and sustainable infrastructure industries.

Supply. Hannon Armstrong Sustainable Infrastructure Capital presentation

The industries Hannon Armstrong supplies capital for are rising, partly resulting from huge public investments and incentives by governments and regulators. There thus is ample market progress for Hannon Armstrong to focus on. We imagine that Hannon Armstrong will develop its earnings at a low double-digit tempo over the approaching 5 years, which is a powerful progress fee for an revenue inventory.

Between its strong dividend yield and excessive earnings progress, Hannon Armstrong ought to ship compelling whole returns over the approaching years, making the corporate among the finest dividend progress shares.

Click on right here to obtain our most up-to-date Certain Evaluation report on Hannon Armstrong (HASI) (preview of web page 1 of three proven beneath):

Dividend Development Inventory #1: Baxter Worldwide (BAX)

Baxter Worldwide develops and sells quite a lot of healthcare merchandise, together with organic merchandise, medical units, and linked care providers units used to watch sufferers. Its merchandise are utilized in hospitals, kidney dialysis facilities, nursing houses, docs’ places of work, and sufferers at house below doctor supervision. Baxter has paid dividends to shareholders for 32 consecutive years.

On April twenty seventh, 2023, Baxter Worldwide reported Q1 2023 outcomes for the interval ending March thirty first, 2023. For the quarter, income fell 1.6% to $3.65 billion, however this was $50 million greater than anticipated. Adjusted earnings-per-share of $0.59 in contrast unfavorably to $0.93 within the prior 12 months, however was $0.06 forward of estimates.

Baxter takes the highest spot among the many greatest dividend progress shares resulting from its anticipated earnings and dividend progress, and enticing anticipated returns.

Click on right here to obtain our most up-to-date Certain Evaluation report on Baxter (BAX) (preview of web page 1 of three proven beneath):

Ultimate Ideas

Traders mustn’t ignore one of the best dividend progress shares just because many have low present dividend yields. Corporations with sturdy enterprise fashions, aggressive benefits, and progress potential are enticing no matter their beginning yields.

One of the best dividend progress shares unleash the ability of compounding. There are various instances through which one of the best dividend progress shares may produce the next yield on price over time than a inventory with the next present yield however little or no dividend progress.

These 12 of one of the best dividend progress shares have the potential to boost their dividends by 10% per 12 months or extra for the foreseeable future, which makes them a horny mixture of dividend progress and whole returns.

Different Dividend Lists

The Dividend Aristocrats checklist will not be the one option to rapidly display screen for one of the best dividend progress shares. If you’re fascinated with discovering extra of one of the best dividend progress shares, the next Certain Dividend assets will likely be of curiosity to you.

Blue Chip Inventory Investing 

Different Certain Dividend Sources