Dividend growth investing is a strategy that focuses on companies which regularly raise dividends. The strategy focuses on growth in dividends over a longer period of time that usually exceeds ten years. The typical dividend growth stock does not yield a lot today, but can generate very high yields on cost, that will definitely trump even some of the highest yielding stocks today. As a result, dividend growth investors focus on the catalysts that can generate a higher net income for the corporations whose stock they are purchasing. Companies can earn more by selling more, increasing prices, streamlining operations, expanding in new markets, selling new products or acquiring and merging with other companies. Mergers and acquisitions can only lead to higher earnings per share if they result in synergies. We want growth in earnings per share after all, not just a growth in overall net income.
The important tool that makes dividend growth investing is growth in earnings per share. Growth in earnings per share enables companies to increase dividends over time in a sustainable matter. A company that grows dividends for a period of time without corresponding earnings growth will eventually run out of room to boost distributions.
Here are companies that have increased their dividend payouts for several consecutive years.
Energy Transfer Equity LP (NYSE:ETE) traded 18,898,598 shares on last trading session with closing price of $17.76.
ETE was trading -10.53% below its 52-week high and 77.22% above its 52-week low. Its last 5-Year EPS growth stands at 21.30%; with earnings growth of -28.40% yoy. The stock stands -5.54% below the average-price of 50 days and -4.52% compared with the SMA 20.
The stock has a 1-year performance up 43.18% and a negative weekly performance at -4.82%. Moreover, the stock is down -6.97% in one month through last close, to $17.76, showing a -6.77% return during the past three months. The company is set at a mean analysts’ recommendation of 2.30.
ETE has been paying dividends since 2006 and has raised their dividend for 10 consecutive years. It has a dividend yield of 6.40% and a 5 year dividend growth rate of 13.61%. Their payout ratio is 136.00%.
Plug Power Inc (NASDAQ:PLUG) shares moved to $2.29 after opening the day at $2.14, on Friday. The stock floated in a price range of $2.11 to $2.30, with market capitalization of $547.54M. The stock exchanged hands with 11,394,473 shares lower as compared to its average daily volume of 12.60M shares. If we take a look on its volatility, 5.98 percent was seen in a week and for the month it was 8.74 percent.
The company’s net profit margin stands at -67.00% whereas its return on equity (ROE) is -57.70%. It has 223.44M of outstanding shares and its shares float measured at 243.24M. The average analysts gave this company a mean recommendation of 2.20.
PLUG first paid dividend in None and has increased their dividend for 0 straight years. They have a dividend yield of 0.00% and a 5 year dividend growth rate of 0.00%.
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