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
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Family Dollar Stores
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In technology, there's
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. Food companies include
Archer Daniels Midland
. From consumer products, there's
Procter & Gamble
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Church & Dwight
. From energy, there's
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.