The dividend growth investing strategy has been a godsend to me. By living below my means and investing my hard-earned savings into high-quality dividend growth stocks, I was able to retire in my early 30s.
It wasn’t easy to get into that position. But if something is worth having, it won’t be easy to get it. And let me just say, financial freedom is definitely worth all of the so-called “sacrifices”.
Because I can think of no bigger sacrifice than not being free in life. Financial freedom isn’t a static, unchanging position, either. It’s one that actually gets better and better as time goes on.
If you’re living off of passive dividend income from high-quality dividend growth stocks, your financial situation is improving year after year.
That’s because these stocks are routinely increasing their dividends to shareholders. Which is good news. Since inflation causes the cost of life to rise over time, you want to make sure your passive income can keep up.
With a lot of high-quality dividend growth stocks increasing their dividends at rates that exceed inflation, you should actually see your purchasing power grow over time.
Today, I want to tell you about three dividend growth stocks that just increased their dividends. Ready? Let’s dig in.
#1 Dividend Growth Stock Paying Bigger Dividends: Bank OZK (OZK)
Bank OZK just increased their dividend by 1.8%.
I know. I know. 1.8%? That’s not greater than inflation, right? Well, here’s the thing. And it’s a very cool thing. Bank OZK tends to increase their dividend every quarter. This is already the third dividend increase this year. Unlike most other banks, Bank OZK never paused dividend growth. The train keeps on chugging.
The regional bank has increased its dividend for 25 consecutive years.
That’s a vaunted dividend growth track record, up there with the Dividend Aristocrats of the world. With a yield of 2.7% and a 10-year dividend growth rate of 21.8%, this is a compelling combination of yield and growth.
The stock is up more than 30% this year, but the valuation isn’t unreasonable.
Pretty much every basic valuation metric for the stock is in line with, or even below, its respective recent historical average. The P/E ratio of 12.7 is certainly not extreme, nor is the P/B ratio of 1.2. If this regional bank wasn’t on your radar before, now it is.
#2 Dividend Growth Stock Paying Bigger Dividends: Essential Utilities (WTRG)
Essential Utilities just increased their dividend by 7%.
Your bills are consistent and reliable, right? I know mine are. Well, you want passive income to be just as consistent and reliable, if not more so. And on this count, Essential Utilities delivers.
This is the 29th consecutive year of dividend increases for the water and natural gas utility company.
How’s that for reliable? Oh, yeah. Consistency. Let’s also talk about that. Essential Utilities increases its dividend by about the same 7% like clockwork. Last year’s dividend increase was 7%. The one before that? Yep. 7% again. Gotta love that. While the stock’s yield of 2.3% won’t light the world on fire, the consistent, reliable nature of the dividend raises is worth a lot.
This stock has been a laggard. It’s basically flat on the year, which may have created an opportunity.
The market’s up big this year, but this stock isn’t. That’s made it more appealing on a relative basis. The P/E ratio of 28.9 might look rich, but that’s actually well below its own five-year average of 34.5. With water becoming the new liquid gold, water utilities are arguably worth rich valuations.
#3 Dividend Growth Stock Paying Bigger Dividends: Jeffries Financial Group (JEF)
Jeffries just increased their dividend by a whopping 25%!
Take that, inflation. Goods and services are getting more expensive by the day. That’s just a fact of life. But when you have dividend growth stocks handing out big dividend increases like this, dealing with inflation becomes as easy as taking candy from a baby.
The financial services company has increased its dividend for five consecutive years.
If you think this 25% dividend increase was already impressive, buckle your seat belt. This is actually the second dividend increase from Jeffries in 2021. With both dividend increases factored in, the dividend is up 66.7% this year. That’s some very nice dividend growth acceleration off of the five-year dividend growth rate of 19.1%, which in and of itself is very strong.
The stock is up 35% this year, but recent business results can justify this.
This stock has been killing it in terms of performance. But so has the business. Their most recent quarter showed 70% YOY revenue growth. Of course, that’s coming off of some depressed numbers from 2020, so you have to take it with a big grain of salt. Still, the business is firing on all cylinders – and then some. Make sure to take a good look at this stock.
— 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.
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