Hi there, Fools! I’m back to highlight three attractive dividend growth stocks. As a quick reminder, I do this because companies with consistently growing dividends
- usually have the competitive muscle to back up those payments;
- can provide an ever-increasing income stream regardless of market conditions; and
- tend to outperform over the long haul.
A high dividend yield is great. But the consistency and rate in which that dividend grows is often more important.
In today’s article, I’ll look at three dividend-growth plays that look particularly juicy for 2019.
Telus something we don’t know
Kicking off our list is Telus (TSX:T)(NYSE:TU), which has delivered 14 consecutive years of dividend growth. Shares of the telecom giant are down 5% over the past year versus a flat return for the S&P/TSX Capped Telecommunication Services Index.
Telus’s dividend increases continue to be backed by strong fundamentals. In the most recent quarter, revenue and EBITDA grew 11% and 8%, respectively. More importantly, free cash flow increased 41%.
“This builds on our proven track record of providing investors with the industry’s best multi-year dividend-growth program,” said President and CEO Darren Entwistle. “Notably, Telus has now returned $16 billion to shareholders, including $10.8 billion in dividends, representing $27 per share since 2004.”
With a juicy dividend yield of 4.7%, Telus is a top income play for 2019.
The whole package
Next up, we have CCL Industries (TSX:CCL.B), which has posted 16 straight years of dividend growth. Shares of the specialty packaging company are down 12% over the past year versus a loss of 19% for the S&P/TSX Capped Consumer Discretionary Index.
On top of incredibly reliable dividends, CCL is a solid bet to bounce back in 2019. In the most recent quarter, adjusted EPS increased 8% as sales grew 10.8% to $1.34 billion.
“CCL Segment posted stronger than expected organic growth in the quarter, especially in the Home & Personal Care and Food & Beverage sectors on new business wins and share gains,” said President and CEO Geoffrey Martin.
When you combine CCL’s highly diversified nature — both by product line and geography — with its consistent dividend growth, the stock’s downside seems limited.
Rounding out our list is none other than Toronto-Dominion Bank (TSX:TD)(NYSE:TD), which has delivered dividend growth for eight straight years. Shares of the banking gorilla are down 9% over the past year versus a loss of 13% for the S&P/TSX Capped Financial Index.
TD’s business momentum should carry into 2019. For the full year 2018, diluted EPS increased 10% to $6.01 as revenue grew 7.4% to $38.8 billion. Meanwhile, adjusted return on equity improved to 16.9% from 15% in 2017.
“We enter 2019 from a position of strength,” said President and CEO Bharat Masrani. “While there are a number of macro-economic and geopolitical unknowns in the year ahead, the progress we made in 2018 gives me confidence in our future success.”
With a dividend yield of 3.8%, betting on that bullishness seems like a no-brainer.
The bottom line
There it is, Fools: three top dividend-growth stocks for 2019.
As always, they aren’t really formal recommendations. They’re simply a starting point for more research. Mr. Market punishes dividend cuts particularly hard, so plenty of homework is still required.
The financial world is buzzing as Iain Butler and his team of market-beating analysts in Stock Advisor Canada pick their favorite stocks for 2019 and beyond.
As a special gift for investors, they’ve decided to give away one of their top TSX stock picks of 2019 for FREE.
Fool contributor Brian Pacampara owns no position in any of the companies mentioned. CCL Industries is a recommendation of Stock Advisor Canada.