If you’re looking for top stocks you can use to grow your dividend income while also building portfolio growth for decades into the future, you should take a look at these gems:
1. Johnson & Johnson
Johnson & Johnson (JNJ) is a reliable, recession-hardy investment that routinely adds value and growth to its shareholders, plus the company has a dividend yield of 2.5%.
The best part of Johnson & Johnson’s dividend is not its yield but its 60 years of maintaining and increasing its dividend. Johnson & Johnson is what we call a rare Dividend Titan. In fact, this group of stocks is so small that under 30 companies got this title in 2020.
J&J entered the pandemic on solid footing. In 2018 and 2019, the firm had sales growth of 6% and 3%. And while the pandemic did adversely affect some sales, the company’s consumer health and pharmaceutical businesses helped it gain a positive growth in 2020.
Johnson & Johnson had a huge win when the FDA approved its single-dose COVID-19 vaccine for emergency use authorization. However, since it agreed to give the doses without taking a profit during the pandemic, the vaccine won’t impact the company’s bottom line.
Johnson & Johnson’s great track record of maintaining and increasing its dividend and its range of products has let it survive many of the worst crises of modern times. Investors who are thinking long term should not think twice about buying shares of this incredible value stock.
3M (MMM) also is a Dividend Titan, having increased its dividend every year for a long and surprising 62 years. The firm’s dividend yields a robust 3% currently.
In 2020, their sales grew by a simple 0.1%, but adjusted free cash flow increased by 18%. The company made incredible steps toward recovery in Q4, showing momentum ahead.
During the fourth quarter, 3M reported around 6% sales growth. Not only did they boost their cash flow by 16% in this three-month time, but EPS also spiked by double digits. Each of 3M’s businesses saw growth in Q4 of 2020. Sales in the company’s businesses grew by rates of 13%, 11%, and 5% just to name a few.
Management is predicting more good growth in the mid-single digits for this year. While 3M has shown mixed finances in past years, it has stayed unwavering in its drive to consistently boost its dividend. Plus its segmented growth and positive cash flow and sales increases during the pandemic are why the stock is a worthy long-term stock.
Finally, Lowe’s (LOW) is another stock that has been crowned a Dividend Titan. The company’s dividend is currently around 1.3%. Although that is not the highest yield, with a hefty 58 years of historical and consecutive dividend increases, there is plenty to like here for dividend-lovers.
While many retailers have struggled during covid, Lowe’s has benefited by having essential-business status and experienced good growth. In Q4, total comparable sales went up by 28%, while sales from Lowes.com increased by 120%. The company’s total yearly sales increased 24% from 2019, and Lowe’s amassed sales reached $90 billion over that 12-month time.
Lowe’s also gave $452 million in dividends in Q4 of 2020 alone, and almost $2 billion to shareholders in the year. The company has tons of cash to use to keep covering its dividend obligation to shareholders. At the end of 2020, Lowe’s had nearly $5 billion in cash and cash equivalents along with $3 billion in unused revolving credit.
If you’re looking for a top-notch dividend stock for both income and wealth growth, Lowe’s is a great choice.
Author: Blake Ambrose