Dividend Strategists Rewind: 7 Dividend Growth Stocks For February 2022
The latest dividend news, strategies and investing ideas.
Welcome to another edition of my monthly 7 Dividend Growth Stocks series! Every month, I present seven dividend growth stocks from my Dividend Radar watch list for further analysis and possible investment. I use different screens every month to highlight specific elements of dividend growth [DG] investing. This month, income investors will find some high-yielding candidates worth consideration.
I screened for discounted DG stocks in Dividend Radar yielding at least 4% and a 5-year dividend growth rate of 6% or higher. I also screened for DG stocks with dividend increase streaks of 10 or more years.
As usual, I employed DVK Quality Snapshots and my ranking system to rank candidates and present the seven top-ranked stocks in this article.
In case you missed previous articles in this series, here are links to them:
Screening and Ranking
For this month’s article, I used the following screens:
Investment Grade stocks (DVK Quality Scores of 15-25)
Dividend Increase Streak of at least ten years
Forward Dividend Yield is at least 4.0%
5-Year Dividend Growth Rate is at least 6.0%
Discounted relative to my fair value [FV] estimate
To estimate FV, I collect fair value estimates and price targets from several sources, including Portfolio Insight, Finbox, and Morningstar. Additionally, I estimate fair value using each stock’s five-year average dividend yield. With up to eleven estimates and targets available, I ignore the outliers (the lowest and highest values) and use the average of the median and mean of the remaining values as my FV estimate.
The latest Dividend Radar (dated January 28, 2022) contains 717 DG stocks. Of these, 338 stocks are Investment Grade, 268 stocks have dividend increase streaks of ten or more years, 80 stocks yield at least 4%, 524 stocks have 5-year dividend growth rates of 6% or higher, and 407 stocks are discounted. Exactly seven stocks pass all four screens.
I ranked these candidates by sorting their DVK Quality Scores in descending order and breaking ties using my usual tie-breaking metrics:
Forward Dividend Yield
7 Top-Ranked Dividend Growth Stocks for February
Here are top-ranked dividend growth stocks that passed this month’s screens:
I own three of these stocks in my DivGro portfolio.
Below, I provide a table with key metrics of interest to dividend growth investors:
Yrs: years of consecutive dividend increases
Qual: DVK Quality Snapshots quality score
Fwd Yield: forward dividend yield for a recent share Price
5-Avg Yield: 5-year average dividend yield
5-DGR: 5-year compound annual growth rate of the dividend
5-YOC: the projected yield on cost after five years of investment
C#: Chowder Number, a popular metric for screening dividend growth stocks
5-TTR: 5-year compound trailing total returns
VL Safety Rank: Value Line's Safety Rank
VL Fin Stren: Value Line's Financial Strength ratings
MS Econ Moat: Morningstar's Economic Moat
S&P Cred Rating: S&P Global's Credit Ratings
SSD Divi Safety: Simply Safe Dividends' Dividend Safety Scores
Buy Below: my risk-adjusted buy below price
–Disc +Prem: discount or premium of the recent share Price to my Buy Below price
Price: recent share price
My risk-adjusted Buy Below prices allow premium valuations for the highest-quality stocks but require discounted valuations for lower-quality stocks.
The Fwd Yield column is colored green if Fwd Yield ≥ 5-Avg Yield.
Key metrics and fair value estimates of February’s Top 7 Dividend Growth Stocks (includes data sourced from Dividend Radar).
Next, let's look at each stock in turn. All data and charts are courtesy of Portfolio-Insight.com.
AbbVie Inc (ABBV)
ABBV is a worldwide, research-based biopharmaceutical company that develops and markets products to treat conditions such as rheumatoid arthritis, psoriasis, and Crohn's disease; hepatitis C; human immunodeficiency virus; endometriosis; thyroid disease; Parkinson's disease; and chronic kidney disease and cystic fibrosis. ABBV was incorporated in 2012 and is based in North Chicago, Illinois.
ABBV non-GAAP EPS and dividends paid (TTM), with stock price overlay
OGE Energy Corp (OGE)
Founded in 1995, OGE, together with its subsidiaries, provides energy and energy services primarily in the south-central United States. The company operates in two segments, Electric Utility and Natural Gas Midstream Operations. It offers physical delivery and related services for both electricity and natural gas. OGE is headquartered in Oklahoma City, Oklahoma.
OGE non-GAAP EPS and dividends paid (TTM), with stock price overlay
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Also read:
7 Dividend Growth Stocks For January 2022
Top 7 Dividend Growth Stocks Picks For 2022
8 Best Defensive Dividend Growth Stocks
4 High Yield Closed-End Funds For Your Income Portfolio
2 Dividend Stocks On My Buy List
Focusing On Income, Too Many Stocks & Wrong Valuation: More Mistakes You Could Be Making