Make a play for high-growth dividend stocks!
Hopefully, you have checked out our model stock portfolio for high-growth dividend stocks.
It holds some of my favorite and fastest-growing dividend stocks.
Here are 5 of the best…
5 High-Growth Dividend Stocks
So today, I’m going to discuss 5 excellent dividend stocks with high dividend growth. They are:
- Hormel Foods
- NextEra Energy
Disclosure: At no cost to you, I may get commissions for purchases made through links in this post.
Each stock is linked to its most recent dividend stock analysis for the company. In case you want to learn more.
Sure you can get dividend growth and high dividend yields from ETFs. But I enjoy picking stocks. Maybe you do too!
High-Growth Dividend Stocks
Also, I enjoy featuring groups of stock investments that I have selected for the model stock portfolio that share similar characteristics.
And, today’s focus is on 5 high-growth dividend stocks. Because each one has demonstrated high dividend growth rates during the past several years.
Rather Than High Dividend Yields
Dividend stock investors, including me, can fall in love with stocks that have high dividend yields. Those high dividend yields are great for the passive income cash flow they provide.
That being dividends. My favorite kind of passive income.
However, high dividend yields usually come with slower dividend growth at best. Or perhaps, questionable dividend safety. And, in the worst case, the possibility of a future dividend reduction.
Chasing High Dividend Yields
In my younger years, I chased higher dividend yields. And, I still own a few dividend stocks with dividend yields of more than 5%.
But, I have found that high-quality dividend growth stocks are my best-performing investments over the long term. Usually, they are dividend stocks with the best dividend yields.
Typically, less than 5%. And that is okay with me.
Next, let’s dig a little deeper into today’s featured content.
Specifically, 5 stocks with the fastest-growing dividends.
Please note that the dividend statistics are as of the time of this article update. I source them from the Simply Investing Report & Analysis Platform.
Simply Investing is a great resource. For current dividend metrics, stock valuation, and stock recommendations.
Helping you buy the right dividend stocks. And buy them at the right time. With the best information to do so.
Now, onto today’s feature: best dividend growth stocks…
Hormel Foods (NYSE: HRL)
Hormel Foods is a Fortune 500 company. The company manufactures and markets high-quality, brand-name food and meat products.
Their brands number more than 50. Chances are you have consumed one or more of their products.
Hormel’s Brand Power
Here are just a few of those brand names you might recognize.
- Dinty Moore
- Lloyd’s Barbeque
- Staff Chili
- Wholly Guacamole
Hormel Food’s brands typically hold the number 1 or number 2 market share in the category they compete.
Furthermore, Hormel pepperoni is the leading brand of pepperoni in retail grocery. Finally, more than 90 million jars of Skippy peanut butter are produced annually.
Source: Hormel Foods Brands
Hormel Dividend Information
Hormel is a Dividend King having increased its dividend annually since 1967.
Dividend Kings are those rare companies that have increased their dividend annually for at least 50 years.
Hormel High-Growth Dividend Statistics
- Recent dividend yield – 2.2%
- 20-year average dividend growth rate: 13%
Hormel has a rich history of dividend growth and a reasonable dividend payout ratio. Finally, I expect Hormel to continue growing its dividend by mid-single-digit percentages each year moving forward.
Related: Hormel Foods stock and dividend analysis
NextEra Energy (NYSE: NEE)
NextEra Energy is one of the largest electric power and energy infrastructure companies in North America. The company is also a leader in the renewable energy sector.
NextEra has two primary businesses, Florida Power & Light (FPL) and NextEra Energy Resources (NEER).
FPL is the largest electric utility in the state of Florida. It is also one of the largest electric utilities in the U.S.
While NEER is the world’s largest generator of renewable energy. The energy comes from the wind and sun.
Source: NextEra Energy Company Overview
NextEra Dividend Information
NextEra’s dividend is a bit unique in the utility industry. Normally, utilities have higher dividend yields. And, higher dividend payout ratios. Thus, they are solid choices for making money from dividends.
NextEra High-Growth Dividend Statistics
- Recent dividend yield – 2.2%
- 20-year average dividend growth rate: 9%
I expect the dividend increases to keep rolling from NextEra energy.
For my planning purposes, I am projecting high single-digit percentage increases to NextEra’s dividend rate per share in future years.
Related: NextEra Energy stock and dividend analysis
Paychex (Nasdaq: PAYX)
Paychex is a leading provider of integrated human capital management (HCM) solutions. They specialize in small to mid-sized businesses.
Their range of services includes:
- Payroll processing
- Human resources management & outsourcing services
- Business insurance
Source: Paychex business solutions
Paychex Dividend Information
Paychex has historically paid out about 80% of earnings to investors in the form of dividends. So, as the company grows, your passive income from their dividend grows.
Paychex High-Growth Dividend Statistics
- Recent dividend yield – 3.0%
- 20-year average dividend growth rate: 14%
I am looking for more mid to high single-digit percentage dividend increases in the coming years.
Related: Paychex stock and dividend analysis
Medtronic (NYSE: MDT)
Medtronic is a global healthcare solutions company. They are committed to improving people’s lives. And do this through medical technologies, services, and solutions.
The company produces and sells products in these areas:
- Cardiac and vascular
- Minimally invasive therapies
- Restorative therapies
- Diabetes services and solutions
Source: Medtronic products
Medtronic High-Growth Dividend Statistics
- Recent dividend yield – 2.4%
- 20-year average dividend growth rate: 12%
Health Care Sector Exposure
As the population ages, health care spending is expected to increase. So, it’s always a good idea to have exposure to the health care industry in a dividend stock portfolio.
Pharmaceutical companies often show off high dividend yields. But, Medtronic really shines when it comes to dividend growth.
I am using a 7-9% annual dividend growth rate for my planning purposes. Since I do not think the dividend will grow as fast as it has in the past.
Related: Medtronic stock and dividend analysis
Cummins (NYSE: CMI)
Cummins designs, makes, sells, and services:
- Diesel and alternative fuel engines
- Diesel and alternative-fueled electrical generator sets
- Related components and technology
Customers are serviced through a network of:
- Company-owned and independent distributor facilities
- Thousands of dealer locations world-wide
Cummins operates in nearly 200 countries and territories. They have more than 50,000 employees.
Source: Cummins company overview
Cummins Dividend Information
With healthy dividend increases. Cummins has increased its dividend every year since 2006.
Cummins High-Growth Dividend Statistics
- Recent dividend yield – 2.8%
- 20-year average dividend growth rate: 17%
Being in the industrial equipment sector, Cummins is vulnerable to economic recessions. So, proactive dividend payout ratio management keeps the dividend safe during difficult economic times.
Thus, the company may slow dividend growth during tough times. But once the economy and company sales rebound, attractive dividend growth normally follows.
Dividend Payout Ratio
Speaking of the dividend payout ratio. It is an important metric that many dividend investors follow closely.
A lower payout ratio helps a company maintain or even increase its dividend during difficult times.
Also, a lower dividend payout ratio also provides a layer of dividend safety. It provides protection from a dividend reduction when profits fall.
Related: Cummins stock and dividend analysis
Before I wrap up, allow me to offer a few tips for beginning investors. Interested in getting started with dividend growth stocks…
For The Beginning Investor
Experienced investors know what to do.
But new investors will often ask me: “How do I get started? “Can I get started without a lot of money?”
So, here is my answer to those two questions…
You Need A Brokerage Account
First off you need a brokerage account. It is the easiest and most convenient way to invest in stocks. An excellent option is Webull.
Webull is an app. You can set up an account right on your phone or tablet. It’s free to set up and once you are set up, you can buy or sell stocks for free.
I have researched and written a review about the Webull app.
You can read it here: Webull review – Free Online Stock Trading Platform.
Or, just sign up now. For a limited time, Webull is offering new accounts free stock!
Start With 1 Dividend Stock
Anyone that starts investing in dividend stocks, starts with 1. And then adds on from there.
For diversification, I believe it is best to build up to at least 5. A portfolio of 20 dividend stocks would be nearly optimal.
But do not let that scare you away. You just need to start with 1 share of 1 stock.
We are talking about long-term investing here. So you will have time to buy more as you have more money.
Remember that every journey starts with a first step. Most importantly, dividend investing is a long journey. It requires patience and a long-term state of mind.
But What Stock Should You Buy?
So let’s say you have read this article and Hormel Foods popped out to you. After all, maybe you like Hormel chili or Wholly Guacamole.
Now here is an important investing rule. Invest in companies you know and understand.
Coke, Pepsi, McDonald’s, Target all come to my mind immediately. They are all members of my Dividends Deluxe model portfolio.
Are you looking for more dividend stock ideas? You already know I use the Simply Investing Report.
The Simply Investing Report is full of high-quality dividend stock analysis and recommendations. Delivered in an interactive online database.
You Do Not Need A Lot of Money
But, back to Hormel. You have just opened your Webull account and have funded it with $50. That’s right, just 50 bucks.
Now, place a market buy order to buy 1 share of Hormel Foods. Hormel trades under the ticker symbol HRL.
The ticker symbol is how you identify what stock you want to buy.
You can even buy a fraction of a share. If you do not have enough money for a full share.
That’s it. You have a brokerage account. You place a market order to buy 1 share of HRL. Boom, you are part owner in Hormel Foods. And officially a dividend stock investor.
Buy more shares of Hormel as you have more money. Or buy another stock that you are interested in. But for now, just get started with 1 share of 1 stock!
Maybe you need to save up that $50 first to get started? Then, save on all your purchases with Rakuten. And get a cash bonus just for making your first purchase.
You buy a lot of things you need online anyway. Why not save a few bucks and get $10 cash just for doing so.
Another option to get some free money is to open your Webull account. For a limited time, Webull is offering free stock just for signing up.
5 High-Growth Dividend Stocks – Summary
These 5 companies have a solid track record of high dividend growth:
- Hormel Foods
- NextEra Energy
They operate in very different industries and sell a diverse range of products.
But they all have excellent dividend growth, healthy dividend payout ratios, and a track record of sharing their profits with their investors.
5 High-Growth Dividend Stocks – Final Thoughts
This is 1 of my favorite tips for dividend portfolios. Do not forget about dividend growth!
Often times a moderate dividend yield of 2-4% combined with 7-9% annual dividend growth can be a very potent combination for long-term total returns. Total returns are a combination of the recurring dividend payments you receive and share price appreciation.
And finally, for new investors. Remember, just 1 share of 1 stock for less than $50 to get started. Good luck and happy investing!
My Favorite Dividend Investing And Money Resources
Webull: Trade at no cost and get free stock for a limited time
Simply Investing: Dividend stock analysis and recommendations
Rakuten: Save on all your purchases and get $10 Cash
Author Bio, Disclosure, & Disclaimer: Please join me (Tom) as I try to achieve my goals, find my next place to live, and make the most of my money. However, I am not a licensed investment adviser, financial counselor, real estate agent, or tax professional. Instead, I’m a 50-something-year-old, early retired CPA, finance professional, and business school teacher with 40+ years of DIY dividend investing experience. I’m here only to share my thoughts about essential topics for success. As a result, nothing published on this site should be considered individual investment, financial, tax, or real estate advice. This site’s only purpose is general information & entertainment. Thus, neither I nor Dividends Diversify can be held liable for losses suffered by any party because of the information published on this website. Finally, all written content is the property of Dividends Diversify LLC. Unauthorized publication elsewhere is strictly prohibited.
14 thoughts on “5 High-Growth Dividend Stocks For More Income Now”
Of these, my favorite are NextEra (I’m a Florida Power & Light customer) and Medtronic. Electricity and healthcare will always be in demand. I’m thinking of buying some of these stocks with Webull, to complement my main M1 Finance portfolio.
Good luck with the investments Miguel. You can’t go wrong with any of them in my opinion! And agree with your thoughts on essential service companies. They are a great way to build a solid stock portfolio. Tom
I am a rookie & we just lost $120,000 in 2019 Oklahoma Flood. NO HELP from any agencies. Facing foreclosure. Talk about disheartening…
Have wanted to do this a L ON G time. How does a person get paid through investments? When,How, what method of payment, etc.
Hi Sandi. I’m very sorry for your financial loss. To directly answer your questions about getting paid through investments… 1) When? – Most of the investments I cover here at Dividends Diversify pay dividends on a quarterly basis. 2) How? – You buy and own dividend-paying stocks or dividend-paying exchange-traded funds in a brokerage account 3) What method of payment? Your dividends are paid in cash and deposited in that same brokerage account. Once the dividends are deposited in your account, that cash is yours to do with as you choose. However, realize the value of your original investment will fluctuate on a daily basis. Tom
Thank you, very insightful list!
Have to take a closer look to these companies..
Hi FN. Thanks for stopping by. Good luck with your research on these companies and happy investing! Tom
Great list! I wouldn’t have thought of Hormel, I’ll have to take a look at it again while I eat a can of Spam 🙂
Wow. A whole can? Thanks for supporting my investment! Tom
Hi Tom. I like to tilt toward dividend growth over dividend yield as you mentioned.
It looks like a good group of stocks you’ve presented. I own Hormel already.
CMI is one I’m looking to hold again. The recent market turmoil is bringing it closer to a price that makes me want to initiate a position.
I’ve briefly looked at NEE recently as it’s one that DivvyDad brought to my attention, and I don’t currently hold any utilities.
I haven’t looked too closely at MDT and PAYX, but am aware of them and will keep them in my thoughts should I look to grow my portfolio.
2-4% yield coupled with 7-9% dividend growth over many years sounds like a wonderful combination to me.
Thanks for summarizing your thoughts on these stocks ED. And yes the recent market volatility may bring us some opportunities. Tom
I am a new 60ish investor is to late to start?
Hi Susan, It’s never too late to start. The more important question is how long can you keep the money invested? You shouldn’t invest in the stock market unless you have at least a 3-5 year time horizon before selling. Stocks can go down in the short term. So, you don’t want to invest money in stocks you will need in the short term. Tom
Hello Tom, I’m very new to buying dividends. You have piqued my interest in the Webull brokerage account. Can you explain Margin account and Cash account in basic terms? I’ve researched a bit and a Cash account seems like a smarter route to take but you seem like an expert so I want your advice.
Hello Ashley. Thanks for visiting and your question.
I’ve been investing for 40 years (ouch, that sounds old), and have never had a margin account. Therefore, I invest with a cash account. Which just means you deposit cash in your brokerage account. And you can only buy/invest in stocks up to the amount of that cash. Once you own 1 or more stocks, you can sell some or all of them, and as long as you keep that cash from the sales in the account. It is also available to invest in new shares of stock.
On the other hand, a margin account operates like a cash account but ALSO means you can borrow money from the broker to buy even more stock.
Here is an analogy. You go to the store with cash. And the store will let you buy as much stuff as your cash will allow (like a cash brokerage account). Go to the store with a credit card and the store will allow you to buy much more. As much as the rules of your credit card will allow (like a margin account).
Investing with a margin account is much riskier. If you borrow money, and your stocks go down. You are still on the hook to pay back what you borrowed. You can also make more money when your stocks go up. Because you have more money to invest when you borrow. With a cash account, you can’t lose more than the cash you put it. And you can only realize gains based on the cash you have to invest.
If you are just starting out. I suggest you stick with a cash account. Which I can see you have already thought was best. And I agree. But ultimately, the decision is up to you.
Good luck with your investments. Sometimes getting started is the hardest part. Tom
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