These 3 Dividend Aristocrats Are Growing Their Dividends Like Crazy: Illinois Tool Works (ITW), Sherwin-Williams (SHW), and T. Rowe Price (TROW)

Dividend Aristocrats are stocks that have increased their dividends for 25 or more consecutive years.

They’re basically the cream of the crop when it comes to dividend growth stocks. After all, in order to fund a reliable, rising dividend for decades, you must have produced reliable, rising profits for decades.

That’s incredibly difficult. And that’s why dividend growth investing acts as a great filter, eliminating a lot of lower-quality businesses that can’t stand the test of time.

Indeed, of the thousands of publicly-traded companies, there are only 66 stocks in the S&P 500 Dividend Aristocrats index. One misnomer about these stocks is that they’re all old and slow growing. That their best days are behind them.

When you’ve been at it for decades, how can you possibly still grow at a high rate? Well, investors who think Dividend Aristocrats can’t grow at a high rate are wrong.

Today, I’m going to tell you about three Dividend Aristocrats growing their dividends like crazy. Ready?

Let’s dig in.

Dividend Aristocrat #1: Illinois Tool Works Inc. (ITW)

Illinois Tool Works has increased its dividend for 46 consecutive years.

Just think of how many amazing things you have to do in order to consistently grow your business enough in order to provide for safe, reliable, rising dividends for that long. Yet, even after almost five straight decades of higher dividends, this amazing industrial company is still growing its dividend at a very high rate.

Their 10-year dividend growth rate is 13.1%.

That’s well above inflation, which means shareholders are seeing their purchasing power rise and dividend income exponentially increase. Even more impressively, the dividend growth has recently been accelerating – the five-year dividend growth rate is an astounding 16.8%. And you’re pairing that crazy growth rate with a pretty solid dividend – the stock yields 2% right now.

In many ways, Illinois Tool Works is just getting started.

The payout ratio, at 68.8%, is slightly elevated, largely because GAAP earnings have been thrown for a loop by the pandemic. But this is one of the best-managed businesses in America, and I’m 100% confident they’ll bounce back. The stock isn’t cheap, with a P/E ratio of 35, but this Dividend Aristocrat is a long-term winner that’s quadrupled its stock price over the last 10 years.

Dividend Aristocrat #2: Sherwin-Williams Co. (SHW)

Sherwin-Williams has increased its dividend for 43 consecutive years.

That’s a long, long time. And knowing they’ve been increasing their dividend for more than four straight decades, you might think their best days are behind them. That they can’t grow anymore. Wrong.

Their 10-year dividend growth rate is 14%.

And yet again, we have a dividend growth rate that’s accelerating – the five-year dividend growth rate is 14.9%. What’s better than a safe dividend that grows for decades? A fast-growing dividend. And what’s better than a fast-growing dividend? One that’s growing even faster. That kind of growth definitely makes up for the fact that the stock yields less than 1%.

I’m not the only one noticing Sherwin-Williams.

The market clearly likes what it sees. The stock is up almost 900% over the last decade. Again, it’s not cheap – quality rarely is. You get what you pay for. And with a P/E ratio of around 35, you’re paying a quality price for a quality stock.

Dividend Aristocrat #3: T. Rowe Price Group Inc. (TROW)

T. Rowe Price has increased its dividend for 35 consecutive years.

35 and counting, folks, because this dividend keeps on flowing and growing. You’d think that they’d be slowing down at this point. Well, they’re not.

The 10-year dividend growth rate is 12.8%.

That’s strong. Well in excess of inflation. But, again, it does get better. Because once more, we have an acceleration of dividend growth – the three-year dividend growth rate is 16.4%, and their most recent dividend increase came in at a whopping 20%. How’s that for crazy dividend growth?

Even with the quality and all of the growth, this Dividend Aristocrat might just be flying under the radar.

I say that because of the three stocks in today’s video, this one is surprisingly cheap in terms of its valuation. The P/E ratio of 15.2 is very reasonable, and the stock yields 2.4%. We recently put together a video showing how the stock could be worth up to almost $200/share.

If you’re looking to buy a Dividend Aristocrat growing its dividend like crazy, T. Rowe Price is very much worth considering right now.

— Jason Fieber

P.S. If you’d like access to my entire six-figure dividend growth stock portfolio, as well as stock trades I make with my own money, I’ve made all of that available exclusively through Patreon.