Dividend growth investing has been a reliable wealth creator for a large number of investors over the years. There is something magical about compound interest, and when it kicks in, the portfolio growth seems to take on a life of its own. Generally when we discuss dividend growth stocks, we expect them to be slow growth large behemoths that write you a dividend check quarter after quarter. However, there is an advantage to get on to the dividend growth train when these companies are smaller.
Listed below are the top 5 mid cap dividend growth stocks in the market today.
Here are the screener criteria:
- Dividend yield between 1.5% and 3.75%
- Average dividend growth rate for 1 year, 3 year and 5 year > 8% each
- 5 year average EPS growth > 8%
- Payout ratio between 10% and 40%, so there is potential for further dividend increases
- 5 year average sales growth > 4%
And of course, all these companies have a market cap between $2 B and $5 B so they meet our criteria for mid-caps.
Of these stocks, we have invested in TGNA in the recent past as a value investment.
Every other stock on this list is a cyclical stock. KFY is a staffing company. When the jobs are abundant, they are able to place more candidates in the jobs. AGM, also called FarmerMac, supports the farming industry in the US. Sonic Automotive will be affected by the increase in tariffs on automotive sector. KB Home is correlated with the residential real estate.
If you find any of these stocks interesting, please research them further and consider valuation and your economic expectations. These stocks are not a recommendation and are a basis for further research.