Dividend growth stocks can make for underrated investments. Although their yields might be just a few percentage points today, annual rate hikes could result in earning much more on your initial investment over time. For example, a company that grows its payout annually by an average of 7.2% would double its dividend payments within 10 years.
But you also don't want to take on too much risk with a dividend growth stock since there's no guarantee the payouts will continue. Becton, Dickinson (NYSE: BDX) and Costco Wholesale (NASDAQ: COST) are two stocks that look poised to keep increasing their dividend payments and aren't risky buys.
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2 Safe Dividend Growth Stocks You Can Buy and Forget About