For Immediate Release
Chicago, IL – September 17, 2019 - Stocks in this week’s article are Lithia Motors Inc. (LAD - Free Report) , Medtronic plc (MDT - Free Report) , Target Corp. (TGT - Free Report) , Universal Forest Products Inc. (UFPI - Free Report) and Allegiant Travel Co. (ALGT - Free Report) .
Why Should You Invest in Dividend Growth Stocks?
The appeal for dividend ETFs has been rising on investors’ drive for juicy yields and consistent income amid heightened uncertainty and volatility. This is because investors can enjoy rising current income while anticipating capital appreciation irrespective of market conditions.
While there are several dividend stocks that could provide capital appreciation, honing in on stocks with a history of dividend growth leads to a healthy portfolio.
Stocks that have a strong history of dividend growth belong to mature companies, which are less susceptible to large swings in the market, and thus act as a hedge against economic or political uncertainty as well as stock market volatility. At the same time, these offer downside protection with their consistent increase in payouts.
Additionally, these stocks have superior fundamentals that make dividend growth a quality and promising investment for the long term. These include a sustainable business model, a long track of profitability, rising cash flows, good liquidity, a strong balance sheet and some value characteristics. Further, a history of strong dividend growth indicates that dividend increase is likely in the future.
Moreover, a history of dividend growth year over year leads to a healthy portfolio with greater scope of capital appreciation as opposed to simple dividend paying stocks or those with high yields. Although these stocks do not necessarily have the highest yields, they have outperformed for a longer period than the broader stock market or any other dividend-paying stock.
As a result, picking dividend growth stocks appears as a winning strategy when some other parameters are also included.
For the rest of this Screen of the Week article please visit Zacks.com at:https://www.zacks.com/stock/news/520854/why-you-should-invest-in-dividend-growth-stocks
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