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5 Stocks Growing Their Dividends by 25% Per Year

http://www.fool.com/investing/general/2013/11/09/5-stocks-growing-their-dividends-by-25-per-year.aspx

Joe Tenebruso
November 9, 2013

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 midcap, 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 25% or more over the past year.

Company

1-Year Dividend Growth Rate

Qualcomm (NASDAQ: QCOM)

29%

Marathon Petroleum (NYSE: MPC)

28.3%

Valero Energy (NYSE: VLO)

28%

Weyerhaeuser (NYSE: WY)

26.7%

Oracle (NYSE: ORCL)