In identifying dividend growers, I look for companies that not only have a history of dividend increases, but also the ability to continue this trend in the future. Companies with lower dividend-payout ratios, and light debt loads are typically good candidates.
To that end, I looked at U.S. companies that have the following attributes:
- Market caps larger than $5 billion
- Dividend payout ratios of less than 50% for past two years
- Dividends that have been raised for at least the past seven years
- Dividend growth rates of at least 10% for past five years
- Long-term debt-to-equity ratios of less than 50%
About three dozen companies made the grade. The results are a veritable who's who of large-cap names.
Retailers are well-represented on the list. They include Costco (COST - Get Report), CVS Caremark (CVS), Lowe's (LOW), Family Dollar Stores (FDO), Walgreen (WAG), TJX Cos. (TJX), Ross Stores (ROST) and Tiffany (TIF).10 Stocks Poised to Rise in Apple's Wake >> In technology, there's Xilinx (XLNX), Texas Instruments (TXN - Get Report), Intel (INTC) and Analog Devices (ADI). Food companies include Hormel (HRL) and Archer Daniels Midland (ADM). From consumer products, there's Procter & Gamble (PG - Get Report) and Church & Dwight (CHD). From energy, there's Murphy Oil (MUR), ConocoPhillips (COP), and Occidental Petroleum (OXY). That's just the tip of the iceberg. There are also many smaller companies that fit the bill. I'll save that for a future column. -- Written by Jonathan Heller, president of KEJ Financial Advisors and a contributor to TheStreet and Real Money. As of publication, he had no positions in the stocks mentioned.