It's tempting for investors seeking dividend income to limit their searches to only high-yielding dividend stocks. But investors who do this may risk putting too little emphasis on one other important factor: dividend-growth potential.
It stands to reason that stocks with high dividend yields are generally trading at cheaper valuations than companies with low dividend yields. But there's sometimes good reason for some dividend payers to command higher valuations than their peers. In many cases, that reason is simple: Some dividend stocks trade at pricier valuations because their businesses are top-notch and their dividends are likely to grow substantially in the years to come.
Two stocks with low dividend yields today that are still worthy of a dividend-investor's portfolio are Apple (NASDAQ: AAPL) and Domino's Pizza (NYSE: DPZ) . With strong dividend-growth prospects for both companies, it makes sense that the two stocks trade at premium prices relative to their dividend payouts.
For further details see:
2 Top Stocks for Rapid Dividend Growth