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5 Stocks Growing Their Dividends by 30% Per Year

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Dividend investors would be wise to focus not just on a stock's current yield, but also on the long-term growth potential of its dividends. That's because strong businesses that consistently raise their dividend payouts reward shareholders with a steadily rising income stream that essentially equates to a raise every year. And, well, who doesn't like a raise?

But there are other reasons to value dividend growth so highly, and they're well supported by research. For instance, a study by C. Thomas Howard  published in Advisor Perspectives found that for every percentage point a stock's yield rises, its annual return increases by 0.22 percentage points if it's a large cap, 0.25 if it's a mid cap, and 0.46 if it's a small cap. Even better, Howard found that dividend-growing stocks outperformed dividend cutters by 10 percentage points per year from 1973 to 2010 and beat both flat- and no-dividend stocks. And the icing on the cake is that Howard showed that this outperformance came with a third less volatility. Higher returns, less volatility-induced stress, and a steadily growing income stream -- what's not to love?

With that in mind, here are five stocks that have grown their dividends by more than 30% over the past year.


1-Year Dividend Growth Rate

National Oilwell Varco (NYSE: NOV  )


Texas Instruments (NASDAQ: TXN  )


CVS Caremark (NYSE: CVS  )


Western Union (NYSE: WU  )


Kroger (NYSE: KR  )


Source: S&P Capital IQ,

National Oilwell Varco is a global titan in the oil and gas services industry. It provides many types of equipment and components used in oil and gas drilling and production operations, from complex deepwater drilling rigs to small spare parts. Workers in its industry say there's "No Other Vendor," and CAPS participants have awarded National Oilwell Varco with the highest five-star rating. Its stock is currently yielding a growing 1.3%.

Texas Instruments designs and manufactures semiconductors. Its diversified product lineup includes data converters, digital signal processors, microcontrollers, applications processors, and calculators, among many other items. Texas Instruments currently has a four-star ranking on CAPS and offers investors a 3% yield.

CVS Caremark operates more than 7,000 drugstores across the United States. It also offers pharmacy benefit management services to employers, unions, government groups, and other sponsors of health benefit plans. Fools have given CVS Caremark a four-star rating in CAPS, and its stock is yielding 1.6%.

Western Union offers money movement and payment services, allowing people and businesses to send money around the world. Western Union currently sports a four-star rating in CAPS and is yielding 2.7%.

Kroger operates a collection of supermarkets, drugstores, multi-department stores, jewelry stores, and convenience stores under two dozen banners, including Kroger, City Market, Dillons, and Food 4 Less. Kroger also manufactures and processes some of the food for sale in its supermarkets. These diversified streams of revenue have helped Kroger steadily boost its dividend (currently 1.6%) and earn a three-star rating in CAPS.

The Foolish bottom line
Had you invested in these companies a year ago, you would have enjoyed total dividend increases ranging from 30% to 36%. That level of growth would provide a substantial boost to just about any investor's dividend income. But more important to investors today is to identify the companies that will grow their dividends substantially in the years ahead. If you're interested in hearing about some excellent companies that are likely to boost their dividends from this point forward, I'd like to offer you a brand-new free report from The Motley Fool's expert analysts called "Secure Your Future With 9 Rock-Solid Dividend Stocks." Today I invite you to download it at no cost to you. To discover the identities of these companies before the rest of the market catches on, you can access this valuable free report by simply clicking here now.

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Related Tickers

9/30/2016 4:04 PM
CVS $88.99 Down -0.56 -0.63%
CVS Health CAPS Rating: *****
KR $29.68 Up +0.18 +0.61%
Kroger CAPS Rating: ****
NOV $36.74 Down -0.12 -0.33%
National Oilwell V… CAPS Rating: *****
TXN $70.18 Up +0.34 +0.49%
Texas Instruments CAPS Rating: ***
WU $20.82 Up +0.33 +1.61%
Western Union CAPS Rating: ***