Four U.S. stocks to own for high dividend growth

Bronze-rated Franklin U.S. Rising Dividends' manager Don Taylor picks a technology stock, one industrial stock, a medical equipment stock and one semiconductor stock.

Ruth Saldanha 15 November, 2018 | 6:00PM

Most investors love dividends. Dividends provide steady cash inflows, which can be used or reinvested, making them a perfect add to the portfolios of almost all kinds of investors. But one question that many investors have is whether they should focus more on companies that pay high dividends now, or on those whose dividends are likely to grow in the future.

"In the context of an overall investment portfolio, even one focused on income, it is prudent to consider a combination of both dividend growers and high-yield stocks. Companies with a lower yield at present, but a good record of growing the dividend, and good prospects for continued growth in the business may well be the higher dividend companies of the future. Companies with a high dividend yield currently, but no signs of growth, may be in a stage of development where future dividends don't keep up with inflation or, in the worst-case scenarios, could be in jeopardy," says Michael Keaveney, Head of Investment Management at Morningstar Canada.

So if you want to consider companies with healthy dividend growth, where should you look? To answer this, we got in touch with Don Taylor, CIO of Rising Dividends Strategies for Franklin Equity Group and lead manager of the bronze-rated Franklin U.S. Rising Dividends.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Albemarle Corp78.88 USD-2.38
Apple Inc263.12 USD-3.80
Honeywell International Inc155.25 USD-2.70
Microsoft Corp155.45 USD-1.73
Stryker Corp191.39 USD-1.78
Texas Instruments Inc112.22 USD-0.80

About Author

Ruth Saldanha  Ruth Saldanha is Senior Editor at Morningstar.ca