V - If I Could Only Buy 2 Dividend Growth Companies In June 2024
2024-06-04 18:00:00 ET
Summary
- Dividend growth companies are important for any portfolio, continuously enhancing dividend income significantly.
- Certain dividend growth companies are attractive choices for investors at this moment in time, given their current Valuation, growth outlook, financial health and proven track record of dividend growth.
- In today’s article, I will present you with two appealing dividend growth companies which you could add to your portfolio during this month of June.
Investment Thesis
Dividend growth companies are particularly attractive for younger investors who are looking for ways to generate extra income. They can benefit most from the compounding effect when choosing to reinvest the dividend payments they receive. When compared to high dividend yield companies, dividend growth companies exhibit lower Dividend Yields but higher Dividend Growth Rates, contributing to increasing your additional income to a higher degree.
In this article, I will introduce you to two dividend growth companies that I believe are worth investing in during this month of June.
For this selection process, I first made a pre-selection, from which I then selected my top two choices for the month of June. The following pre-requirements needed to be fulfilled:
- Market Capitalization > $10B
- Dividend Yield [FWD] > 0%
- Average Dividend Growth Rate over the past 5 years > 5%
- Payout Ratio < 70% [changed from 60%]
- P/E [FWD] Ratio < 50
- EBIT Margin [TTM] or Net Income Margin [TTM] > 5%
- Return on Equity > 5%