10 Stocks to Consider for Your Dividend Growth Portfolio in 2023
As we navigate the complexities of the financial markets in 2023, dividend growth investing remains a strategic approach for long-term investors seeking to generate passive income and benefit from capital appreciation. Companies that consistently increase their dividends signal financial health and strong operational performance, making them attractive choices for a dividend growth portfolio. Here, we’ve compiled a list of 10 stocks to consider in your dividend growth strategy this year.
1. Johnson & Johnson (JNJ)
Johnson & Johnson has been a cornerstone of the dividend growth investing community, boasting a remarkable track record of increasing dividends for over 60 consecutive years. The company operates in the pharmaceuticals, consumer health, and medical devices sectors, providing a diversified revenue stream. With a steady business model and significant investments in innovative healthcare solutions, JNJ remains a cornerstone in many portfolios.
2. Procter & Gamble Co. (PG)
Procter & Gamble is a consumer staples giant known for its strong portfolio of brands, including Tide, Gillette, and Pampers. The company has a history of reliable dividend payouts, increasing dividends for 66 consecutive years. With a focus on essential products and emerging markets, PG is well-positioned to deliver both dividends and capital appreciation.
3. Coca-Cola Co. (KO)
Coca-Cola has been delivering dividends for over a century and has increased its dividend for 60+ years. This resilient beverage company remains a strong player in the market, continually innovating and adapting to consumer trends. The company’s hefty yield and commitment to returning capital to shareholders make it a compelling choice for income-focused investors.
4. 3M Company (MMM)
3M is known for its diverse portfolio of industrial and consumer products, with a robust record of dividend payments for over 60 years. Despite facing challenges in recent times, the company is investing in innovation and sustainability, positioning itself for future growth. Its attractive dividend yield and commitment to shareholder returns make it an intriguing option.
5. PepsiCo, Inc. (PEP)
PepsiCo is more than just a beverage company; it also has a significant food division that includes popular brands like Lay’s, Doritos, and Quaker. The company has increased dividends for 50+ years, showcasing its resilience and adaptability. With its diversified business model and strong brand equity, PepsiCo can provide steady income along with capital appreciation potential.
6. Realty Income Corporation (O)
Known as "The Monthly Dividend Company," Realty Income specializes in retail and commercial properties, offering consistency in monthly dividend payments. With a robust growth strategy that includes acquiring creditworthy tenants and expanding its property portfolio, O demonstrates resilience in varied economic conditions. Its focus on dividend reliability attracts income-minded investors.
7. ABM Industries Incorporated (ABM)
ABM Industries is a provider of facility management services, which includes cleaning, security, and maintenance. This lesser-known stock has a solid track record of increasing dividends for decades, even during economic downturns. As businesses continue to focus on maintenance and facility management post-pandemic, ABM offers growth potential along with consistent dividend payments.
8. ExxonMobil (XOM)
As one of the largest oil and gas companies in the world, ExxonMobil has faced significant volatility due to fluctuating energy prices. However, it boasts over 39 years of dividend growth, reflecting its commitment to returning capital to shareholders. With energy demand expected to rise and its ongoing investments in renewable energies, ExxonMobil could present an attractive opportunity for dividend growth.
9. McDonald’s Corp. (MCD)
McDonald’s is a leader in the fast-food industry, with a globally recognized brand and a well-defined growth strategy. With a consistent pattern of dividend increases for over 40 years, MCD’s robust business model remains appealing. The company’s focus on digital initiatives and international expansion enhances its long-term growth potential while continuing to deliver dependable dividends.
10. Target Corporation (TGT)
Target has transformed its business model in recent years, enhancing its e-commerce capabilities and store experience to attract consumers. With a history of strong dividend growth and a focus on shareholder returns, Target has proven its resilience in a competitive retail landscape. Its ongoing commitment to increasing dividends positions it as a strong candidate for income-focused investors.
Conclusion
Creating a dividend growth portfolio requires thoughtful selection of stocks that not only offer consistent payouts but also have the potential for capital appreciation. The stocks listed above represent a diverse mix of industries and strengths, providing a solid foundation for long-term investment success. As always, it’s essential to conduct thorough research and consider your financial goals and risk tolerance before making investment decisions. In 2023, these companies stand out as strong contenders for building a sustainable and rewarding dividend growth portfolio.