Economists predict the United States’s GDP (gross domestic product) will grow at 1.2% in 2024, a substantial decline from 5.2% in the third quarter. A slowdown in construction spending and manufacturing could impact GDP growth. So, the equity markets could remain volatile in the near term. Meanwhile, investors can strengthen their portfolios with quality dividend stocks to sail through this challenging period.
Here are three stocks that have raised dividends at a healthier rate, depicting their solid and consistent financials. So, these three stocks could strengthen your portfolio.
Canadian Natural Resources
Canadian Natural Resources (TSX:CNQ) operates a diversified asset portfolio across North America, the United Kingdom, and Africa. Supported by its long-life and low-decline reserves, the company’s production and free cash flow are sustainable even in a lower-price environment, thus allowing it to raise its dividend at an annualized rate of 21% for the previous 24 years. With a quarterly dividend of $1/share, its forward yield is at a healthy 4.72%.
Although oil prices have cooled substantially compared to September highs, the Organization of the Petroleum Exporting Countries and its allies could support oil prices through voluntary production cuts. The company also enjoys a low breakeven oil price thanks to its efficient and effective operations. Further, its continued capital investments and decline in debt levels could continue to drive its financials in the coming years, thus allowing it to continue its dividend growth.
goeasy
goeasy (TSX:GSX) would be my second pick. The subprime lender has grown its top line and adjusted EPS (earnings per share) in double digits for the last 20 years. Supported by solid financials, the company has paid dividends uninterruptedly for 19 previous years while raising the same at an annualized rate of over 30% since 2014. It currently pays a quarterly dividend of $0.96/share, with its forward yield at 2.59%.
Meanwhile, the company is growing its loan portfolio through its diversified product base, omnichannel offerings, and cross-selling. Further, it is also improving its underwriting and income verification processes and adjusting its affordability calculations and credit thresholds to reduce default rates. Amid these initiatives, the company’s management expects its loan portfolio to grow over 48% to reach $5.1 billion in 2025. Also, its top line could grow at an annualized rate of 18.5% while expanding its operating margins by 1% annually until 2025.
Although goeasy’s dividend yield is on the lower side, investors could benefit from its consistent dividend growth at a high rate, making it an attractive buy.
Waste Connections
Waste Connections (TSX:WCN) would be my final pick. The solid waste management company operates primarily in secondary and exclusive markets, thus facing lesser competition and enjoying higher margins. Also, given the essential nature of its business and aggressive expansion through acquisitions, the company has grown its financials at a healthier rate. Supported by these strong financials, it has raised its dividend at a compound annual growth rate of over 15% since 2010.
Meanwhile, Waste Connections continues its aggressive acquisition strategy, which could drive its financials in the coming years. Supported by these acquisitions and solid underlying business, the company’s management expects its 2024 revenue to grow by mid to high single digit. Meanwhile, its adjusted earnings before interest, tax, depreciation, and amortization could increase by high single digits. So, I believe Waste Connection is well positioned to continue its dividend growth.
