Top Dividend Growth Stocks to Invest in 2024

Top Dividend Growth Stocks to Invest in 2024

Dividend growth stocks hold a special allure in the world of investing. With a track record of outperforming non-dividend-paying stocks, they offer a compelling strategy for investors seeking stable returns and consistent income streams.

However, not all dividend growth stocks are created equal. Beyond merely considering the length of time a company has been raising its dividend, investors need to delve deeper into the fundamentals to ensure sustainable growth and robust cash flows. In this article, we will delve into some top dividend growth stocks poised for success in 2024.

Top Dividend Growth Stocks in 2024

Here are four top dividend growth stocks to consider adding to your portfolio in 2024:

1. LVMH Moet Hennessy Louis Vuitton (LVMUY)

LVMH Moet Hennessy Louis Vuitton (LVMUY)

As a leading luxury goods retailer, LVMH boasts a remarkable track record of dividend growth, with a 10-year compounded annual growth rate (CAGR) of 12.59%. What’s more impressive is its ability to support this growth with a 13.9% CAGR in free cash flow (FCF). Despite occasional challenges, such as slowing sales reported in the first quarter, LVMH remains a stalwart in the luxury retail sector. With its diverse portfolio of brands and a global presence, it continues to attract affluent consumers. Investors can count on its resilience and current annual dividend yield of 1.7%.

2. UnitedHealth Group (UNH)

UnitedHealth Group (UNH)

In the healthcare sector, UnitedHealth Group stands out as a dividend growth stock with a bright future. With healthcare being a necessity, UNH enjoys consistent demand for its services. Over the past decade, it has achieved remarkable revenue, profit, and dividend growth rates exceeding 10% annually. Its strategic focus on home healthcare through its Optum health services unit further enhances its growth prospects. Despite regulatory scrutiny over recent acquisitions, UNH remains well-positioned to deliver value to investors, with a dividend CAGR of 21% and a solid FCF ratio of 10%.

3. Domino’s (DPZ)

Domino's (DPZ)

The pizza delivery giant Domino’s has been a consistent performer in the restaurant industry, demonstrating impressive dividend growth rates for the past decade. With a near-20% CAGR for its dividend and over 12% growth in FCF, Domino’s exemplifies a company that not only rewards investors but also sustains its payout through robust cash flows. Its innovative “fortressing” strategy and strong brand presence contribute to its continued success. With a recent dividend hike of nearly 25%, Domino’s is poised for further growth, offering investors ample room for future dividend increases.

4. Home Depot (HD)

Home Depot (HD)

Rounding out the list is Home Depot, a dominant player in the home improvement retail sector. While overshadowed by its competitor Lowe’s in terms of dividend history, Home Depot’s recent performance speaks volumes. With a 17% 10-year dividend growth CAGR and impressive FCF growth of 11.1%, Home Depot has demonstrated its resilience and ability to weather economic fluctuations. Its appeal to professional contractors and robust cash flows make it a solid choice for dividend investors seeking stability and growth.

Also read: 7 Highest Dividend Paying Stocks In NYSE And How To Invest In Them

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