Investing in Parker-Hannifin and Lowe's: Exceptional Dividend Growth Stocks Worth Adding to Your Portfolio
Top Dividend Growth Stocks for Consideration in 2024
These two market-beating stocks have been growing their dividends at a blistering pace. Often, the allure of a stock's dividend yield prompts investors to make a purchase. However, yield might not be the best characteristic to consider when evaluating a dividend stock. Many companies with yields surpassing the average of the benchmark S&P 500 often have low valuations and underperform the market over long time frames.
A frequently overlooked statistic in selecting dividend stocks is a company's dividend growth rate
- Companies with annual growth rates exceeding 6% typically have high valuations and deliver market-crushing returns on capital over extended periods.
The underlying reason is that a company's ability to consistently increase cash distributions to shareholders is a direct reflection of its business health. Companies facing difficulties often divert capital elsewhere, while flourishing businesses can afford to reward loyal shareholders with regular increases in their dividend payouts.
Parker-Hannifin Corporation (NYSE: PH) and Lowe's Corporation (NYSE: LOW) are prime examples. Both companies have been delivering market-beating results for shareholders, along with double-digit dividend growth in recent times.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.