Dividend investors can produce outsized total returns by investing in stocks with a mix of yield and growth. Dividend growth stocks have the ability to grow their dividends each year, even during recessions.
One way to do that is to start with the Dividend Achievers, a group of stocks with at least 10 years of consecutive dividend increases. Steady dividend growth over many years is an indication of a growing business, with rising earnings that can return higher shareholder distributions.
These three Dividend Achievers pay dividends to shareholders, and are likely to continue increasing their dividends for many years.
Accenture (ACN)
Accenture (NYSE:ACN) is an information technology company that offers services such as consulting, tech, and outsourcing solutions. Its customers include communications and media companies, banks and other financial corporations, healthcare firms, public services, and a host of other industries.
Accenture has grown its earnings per share by roughly 10% a year since 2010. Its growth has been primarily driven by organic revenue expansion. Except for a small setback during the financial crisis, the company was able to grow its top line every year. The biggest customer groups in terms of revenue generation are what it calls Product (consumer goods, travel industry, retail) and Health & Public Service. There is a lot of pressure on these industries to lower their costs and to optimize their operations. This means that there is a lot of demand for Accenture to help its customers in fields such as digital, cloud, and security services.
As IT remains a growth industry that is impacted by megatrends such as digital, cloud computing, security, and big data, the market for consulting in these fields should remain strong for the foreseeable future.
ACN has increased its dividend for 13 consecutive years while the stock currently yields 1.7%.
Visa (V)
Visa (NYSE:V) is the world’s leader in digital payments, with activity in more than 200 countries. The stock went public in 2008 and its IPO has proven to be one of the most successful in U.S. history. The company’s global processing network provides secure and reliable payments around the world and is capable of handling more than 65,000 transactions a second. In fiscal 2023, the company generated $18 billion in profit.
Over the long term we believe Visa has ample room to keep growing thanks to the global transition toward a cashless society. In 2019, global digital payment volume exceeded cash for the first time in history. However, there are still about 2 billion people worldwide who lack access to cashless payments. Notably, China and India, which have 1.4 billion people each, are still in the early phases of their transition toward a cashless economy.
Visa is a very shareholder-friendly company that returns significant amounts of cash to shareholders. During the fourth quarter, Visa returned $4.4 billion to shareholders via dividends and share repurchases. Visa repurchased 14 million shares of class A common stock in the quarter for $3.4 billion.
In 2023, Visa announced a 16% increase to the dividend to $2.08 per share annually. Visa has increased its dividend for 16 years and the stock currently yields 0.8%.
Comcast (CMCSA)
Comcast (NASDAQ:CMCSA) is a media, entertainment and communications company. As of Q1 2023, Comcast began reporting in two key business segments: Connectivity & Platforms (Residential Connectivity & Platforms and Business Services Connectivity), and Content & Experiences (Media, Studios, Theme Parks).
Comcast reported its fourth quarter and full-year results in January. For the full year, revenue was essentially flat at $121.6 billion, while adjusted EBITDA rose 3.2% to $37.6 billion, and adjusted EPS rose 9.3% to $3.98.
Share repurchases are a meaningful driver of the company’s EPS growth. In 2023, Comcast bought back $11 billion worth of shares at roughly $41.92 per share. The company started a new $15 billion share repurchase program. Comcast also increased its dividend by 6.9%, equating to an annual payout of $1.24.
The cable industry is impacted by the nationwide cord-cutting trend, as some customers are ditching traditional pay TV. So far, Comcast has been able to withstand this trend through growth from its other businesses. Its balance sheet remains solid with a consolidated net leverage ratio of 2.3x at the end of 2023.
Comcast has had 16 consecutive dividend increases. This fast dividend growth was made possible through solid earnings growth and with a safe dividend payout ratio. Its dividend is well-covered by earnings and cash flows. Comcast is one of the largest players in the entertainment industry. CMCSA stock currently yields 3.2%.
On the date of publication, Bob Ciura did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
