Best Projected Dividend Growth Stocks

Although dividend stocks lag when the market is on its way up, they tend to hold up better during downturns, making them a safe investment for many.

Dividend stocks require patience, though. A dividend yield of 20 cents is not much right now, but after re-investing that dividend for years to buy more stock, eventually, investors will enjoy a much larger dividend. This makes these stocks good to invest in early and hold onto through retirement for steady income.

Plus, dividends are not immune to bear markets. While there are a large number of so-called Dividend Aristocrats, which have raised their dividends every year for the last 25 years, and it is more common for companies to increase dividends, roughly 40% of stocks with the highest yields cut or suspended dividends during the recession.

Although dividend stocks can seem safe and boring, there is a benefit in that. According to U.S. News & World Report, dividend-paying stocks provide returns that are comparable to the market and do so with less volatility.

According to Bloomberg, most S&P 500 companies are expected to increase their dividends in the next 3 years, but these 10 companies are projected to show the biggest gains.

Symbol: X

Current stock price: $27.69

Industry: Basic Materials

Projected 3-year dividend growth: 25.99%

Expected dividend current fiscal year: $0.20

Current dividend yield: 0.82%

The steel producer’s stock may be down 11% from the start of the year, but it’s still up nearly 50% over a year ago. Stock price doesn’t necessarily correlate to dividends, though. During the recession when the market was falling to new lows, some companies were still increasing their dividends.

Symbol: SNI

Current stock price: $81.5

Industry: Communications

Projected 3-year dividend growth: 26.14%

Expected dividend current fiscal year: $0.8

Current dividend yield: 1.01%

Scripps’ stock may be down 5% from the start of the year, but it is making a comeback and has been on the rise over the last 2 months. According to the Motley Fool, Scripps’ popular channels, which include HGTV, Food Network, and Travel Channel, have all increased viewership in the key 25- to 54-year-old demographic.

Symbol: HOG

Current stock price: $68.38

Industry: Consumer, cyclical

Projected 3-year dividend growth: 26.85%

Expected dividend current fiscal year: $1.10

Current dividend yield: 1.59%

The motorcycle maker’s stock is flat since the beginning of the year, although it is up 24% from a year ago. The company’s stock was recently downgraded partly because of concern over its aging customer demographic.

Harley-Davidson’s projected 12-month dividend yield is 1.82%, making it one of the biggest among the top 10; plus, it’s last 12-month yield was 1.41%, which is the largest on the list.

Symbol: LUV

Current stock price: $27.61

Industry: Consumer, cyclical

Projected 3-year dividend growth: 30.50%

Expected dividend current fiscal year: $0.22

Current dividend yield: 0.9%

Since the beginning of the year, Southwest’s stock price is up 45%. The airline made its name flying short routes in the US, but recently began operating international flights into Latin America and the Caribbean and competing with American Airlines and United Continental for that region.

However, this isn’t the only airline whose dividend is projected to increase…

Symbol: DAL

Current stock price: $38.67

Industry: Consumer, cyclical

Projected 3-year dividend growth: 35.72%

Expected dividend current fiscal year: $0.30

Current dividend yield: 0.91%

Delta Air Lines has one of the oldest fleets (15.8 years), but the company’s arrivals are on-time 82.6% of the time, which is better than most of its competitors: United Airlines arrivals are on-time just 78.4% of the time, US Airways is on time 80.1% and American Airlines is on-time 76.6%.

Delta’s stock price is up 38% year-to-date.

Symbol: MS

Current stock price: $32.92

Industry: Financial

Projected 3-year dividend growth: 38.9%

Expected dividend current fiscal year: $0.35

Current dividend yield: 1.23%

The first half of the year was rocky for Morgan Stanley’s stock. It’s up 5% year-to-date, but at one point the stock was $33.40 before plummeting 15% to $28.95. The stock’s projected 12-month dividend yield is 1.36%, one of the highest on the list.

Symbol: MA

Current stock price: $76.62

Industry: Consumer, non-cyclical

Projected 3-year dividend growth: 39.35%

Expected dividend current fiscal year: $0.49

Current dividend yield: 0.59%

MasterCard’s stock is actually down since the beginning of the year (-9%), although it is up 30% over a year ago. Over the past 5 years, though, MasterCard has increased its dividend by 30% annually.

The dividend for next fiscal year is expected to be $0.69, which is a 41% increase over the current fiscal year. Projected 12-month dividend yield is 0.72%.

Symbol: RF

Current stock price: $10.88

Industry: Financial

Projected 3-year dividend growth: 45.36%

Expected dividend current fiscal year: $0.18

Current dividend yield: 1.85%

In the past, Bloomberg named Regions Financial the eighth strongest bank in the US. The bank’s projected 12-month dividend yield is 2.08%, which is the largest out of the stocks on this list.

Since the beginning of the year, Regions’ stock price is up 8%.

Symbol: DHR

Current stock price: $79.44

Industry: Industrial

Projected 3-year dividend growth: 50.79%

Expected dividend current fiscal year: $0.4

Current dividend yield: 0.5%

Investors are looking for Danaher to make a big acquisition since it hasn’t made a deal of at least half a million since 2012. According to Bloomberg News, that is the company’s longest drought in 11 years. Washington, DC-based Danaher makes electronic-measuring equipment, medical-diagnostic instruments, and dental tools. The stock is up just 3% since the beginning of the year.

The stock’s dividend yield was 0.22% for the last 12 months, but it is expected to increase to 0.5% for the next 12 months.

Symbol: VMC

Current stock price: $63.85

Industry: Industrial

Projected 3-year dividend growth: 66.11%

Expected dividend current fiscal year: $0.20

Current dividend yield: 0.31%

Vulcan Materials produces and sells building materials like cement and asphalt mix. The demand for those materials is not only expected to remain solid over the next few years, but rise 7.9% this year, according to the Portland Cement Association.

Since the beginning of the year, Vulcan’s stock is up 8%, and since a year ago the stock is up nearly 50%. Next year’s dividend is supposed to increase to 0.25.