The post-election rally has taken stock markets, which were already trading at frothy levels, to new highs. This naturally makes value-focused dividend growth investors nervous about investing new money into anything right now.
Fortunately, there are still great dividend growth stocks that for one reason or another are trading at attractive (not too pricey) levels.
We used our Dividend Safety Scores to find companies with safe dividend payments. (These scores successfully flagged Kinder Morgan, ConocoPhillips, StoneMor Partners and other high-yielding stocks as being high risks before these companies announced dividend cuts.)
Income investors can learn more about Dividend Safety Scores and view their real-time track record by clicking here.
Find out why these 10 high-yield blue-chips are great alternatives to keeping your cash on the sidelines, and why each could deserve a spot in your long-term, diversified dividend portfolio. We own some of these stocks in our Conservative Retirees dividend portfolio.
1. VF Corp. (VFC)
While VF Corp. may offer the lowest of the yields of any of these stocks, it represents one of the best dividend growth stocks you can buy in today's overheated market.
After all, in addition to increasing its dividend each year for an impressive 43 straight years, this dividend aristocrat just raised the dividend by 14% for next year, (more than its 20-year compound annual growth rate of 10.8%) signaling to investors that its long-term growth story remains intact.
That's due to one of the industry's best management teams, which has built up a diverse portfolio of 30 lifestyle and apparel brands including Vans, Wrangler, Nautica, Timberland and The North Face.
And while most corporate acquisitions fail to deliver accretive shareholder value, VF Corp. has proven itself an exception to this rule. That's thanks to a disciplined acquisition approach, in which the company doesn't overpay for new brands, and to large economies of scale that allow management to insert newly acquired brands into the giant global distribution network and boost margins through low-cost manufacturing.
Despite its large size, VF Corp. has a small start-up culture, with management adopting a Warren Buffett-style "hands off" approach to managing its various product lines. This ensures that the quality management teams at acquired companies stay on for decades and then can be tapped to lead the mother company when infrequent management turnover does occur. Or to put it another way, in addition to exemplary current management, VF Corp. has one of the best and deepest management benches in the industry.
Better yet, VF Corp. stock is currently trading about 15% less than its March highs, which means that the stock is trading at a five-year high yield, 33% higher than its historic norms. All of which means that today is an excellent time to acquire one of the best apparel companies in America, a company that is likely to continue delivering fantastic income growth and market-beating total returns in the years to come.
Investors can read my full thesis on VFC here.