5 Upcoming Dividend Increases Including A Dividend King

An analysis of five companies with recent dividend increases averaging 5.4% and a 22-year growth streak, highlighted by PepsiCo's 53-year record, reveals that while these firms demonstrate strong dividend histories, none currently meet the author's criteria for portfolio inclusion due to requirements for significant outperformance over SCHD. The author recommends the Schwab U.S. Dividend Equity ETF (SCHD) for broad dividend exposure while advising individual due diligence.

Analysis

The article highlights companies with consistent dividend increases as indicators of robust financial health and strong cash flow generation, exemplified by five firms averaging a 5.4% dividend hike and a 22-year dividend growth streak, with PepsiCo (PEP) notably achieving a 53-year dividend growth record. The author's methodology combines U.S. Dividend Champions data and NASDAQ dividend updates, focusing on companies with at least five years of such growth. However, despite these positive dividend-paying credentials, none of the five spotlighted companies currently meet the author's specific stringent criteria for portfolio inclusion, which is a demand for significant outperformance over the Schwab U.S. Dividend Equity ETF (SCHD). This perspective underscores a critical consideration for dividend-focused investors: while individual company dividend track records are valuable indicators, their relative performance against broader market dividend strategies or specific benchmarks like SCHD is a key factor for portfolio construction. Consequently, the author recommends SCHD for investors seeking broad exposure to consistent dividend growth, reflecting an overall mildly positive sentiment towards the dividend growth investment theme but a cautious stance on the individual stocks mentioned relative to the author's high personal performance expectations.

Key Decisions for Investors

• Investors seeking income and total returns should recognize the financial strength indicated by consistent dividend increases, such as the 5.4% average hike from the companies mentioned.
• Before investing in individual dividend growth stocks, evaluate their potential to outperform relevant benchmarks like the Schwab U.S. Dividend Equity ETF (SCHD), as the article's author uses this as a key selection criterion.
• Consider a diversified approach through ETFs like SCHD for exposure to dividend growth, especially if specific outperformance hurdles for individual stocks are high or stock-picking is not a primary strategy.
• Always conduct thorough due diligence on individual companies and ETFs, aligning investment choices with personal financial goals and risk tolerance, as emphasized by the analyst.