Are you an investor looking for a reliable source of income? Consider turning to dividend-growing stocks, as recommended by Jefferies. The firm’s global head of quantitative strategy, Desh Peramunetilleke, believes that macro indicators such as falling inflation, slowing economic growth, and easing commodity prices point towards the potential benefits of investing in dividend growers. In a recent note, Peramunetilleke highlighted the expected acceleration in USA dividend growth from 3.9% for 2023 to 6.2% for 2024, with positive revisions across most sectors.
Jefferies defines dividend growers as companies with a strong track record of dividend-per-share growth, a positive free-cash-flow conversion, and a dividend sustainability star rating of three or more. The firm filtered for companies with a market cap of $5 billion or more and a dividend yield above 1.5%, and here are 10 names that made the list.
1. JPMorgan Chase: With a 2.3% 12-month forward dividend yield, JPMorgan Chase is the largest name on the list. The bank recently raised its dividend and has seen its shares rise nearly 13% year to date.
2. AbbVie: This biotech company has a 12-month forward dividend of 3.5% and has seen its shares rise more than 15% this year. Despite facing challenges with declining sales for its autoimmune drug Humina, AbbVie has invested in new drugs and recent acquisitions to drive growth.
3. McDonald’s: With a 2.4% 12-month forward dividend yield, McDonald’s rounds out the list. The fast-food giant reported a strong fourth-quarter earnings beat but faced revenue challenges due to boycotts in the Middle East.
These companies exemplify the potential benefits of investing in dividend growers, especially in the current economic environment. Consider adding these names to your portfolio for stable income and potential growth.
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