These 3 Stocks Are Now Paying Even Bigger Dividends: Accenture (ACN), Lockheed Martin (LMT) and McDonald’s (MCD)

Dividend growth investing. This fantastic long-term investment strategy is all about buying and holding shares in world-class enterprises paying reliable, rising dividends.

While these businesses grow and earn more profit, their shares become worth more. Simultaneously, they also pay out ever-larger cash dividends to shareholders, funded by growing profit.

You’re literally paid to own shares. Actually, you keep getting paid more to own shares. No, actually, you keep getting paid more to own shares that are also becoming worth more.

It’s like having your cake… and eating it, too. Or like having an ever-growing cake and ever-more slices of cake.

Today, I want to tell you about three dividend growth stocks that just increased their dividends. Ready? Let’s dig in.

Dividend Increase Stock #1: Accenture (ACN)

Accenture just increased their dividend by 10.2%.

How about that? If you thought collecting an auto-pilot dividend from a company was sweet, then how sweet is it to collect a dividend that auto-pilots itself higher? All Accenture shareholders had to do to receive this pay raise was to sit on their hands and not sell shares. It doesn’t get any easier than that.

This is the 17th consecutive year of dividend increases for the professional services company.

17 straight years of paying their shareholders more money. How can you not love that? This double-digit dividend increase is par for the course here – Accenture’s 10-year DGR is 14.8%. The stock only yields 1.2%, but this is more of a compounder than an income play. And if you’re a younger investor, that’s just what you want. Meantime, the dividend is protected by a low payout ratio of 43.4%.

The stock is up 30% this year, and the valuation looks stretched to me.

Now, this is a stock that usually has a low yield. However, it’s not usually this low. Its five-year average yield is 1.6%. We’re 40 basis points off of that. And the P/E ratio, at 36.5, is rich when you line it up against the stock’s own five-year average P/E ratio of 26.2. It’s a world-class business for sure, but this valuation is all that and then some. I’d like to see at least a 10% correction in this name.

Dividend Increase Stock #2: Lockheed Martin (LMT)

Lockheed Martin just increased their dividend by 7.7%.

This dividend increase was almost exactly what I was expecting from them. The business just keeps on delivering. As long as the United States needs sovereign defense, which is going to be forever, Lockheed Martin should do well. After all, they’re the largest defense contractor in the world headquartered in the world’s largest buyer of defense products and services.

This is the 19th consecutive year of dividend increases for the defense contractor.

This stock gives you a pretty nice combination of yield and growth. The five-year DGR is 9.8%. So we’re talking about high-single-digit dividend growth here. And then you’re pairing that with a yield of 3.2%. Awfully compelling. And even after this nice dividend increase, the payout ratio is only 43.9%. So there’s plenty of room for many more dividend increases.

This stock has performed relatively poorly this year, and I see it as one of the best long-term investment opportunities in the market right now.

It’s up less than 3% YTD. I’m shocked by this. The business continues to land 10-figure contract after 10-figure contract and put out great numbers, yet the stock flounders. I analyzed and valued the stock in May, showing how shares could be worth about $500/each. It’s at about $353/share right now, so the upside, in my view, could be tremendous.

Dividend Increase Stock #3: McDonald’s (MCD)

McDonald’s just increased their dividend by 7%.

I’m lovin’ it. Another world-class business. Another sizable dividend increase. It’s like seeing the sun rise in the morning. That’s how consistent dividend growth investing can be. And with billions of people all over the world enjoying this company’s food every single day, you already know that this dividend is set to continue growing like clockwork.

The quick service restaurant chain has now increased its dividend for 46 consecutive years.

This dividend increase is almost right in line with the five-year DGR of 7.9%. And this high-single-digit dividend growth is paired with the stock’s yield of 2.2%. Not bad at all. And while the payout ratio is a bit elevated, at 60%, this company has no trouble at all in terms of covering the dividend. This Dividend Aristocrat is positioned very, very well.

The stock is up 18% this year, but the valuation isn’t unreasonable.

I analyzed and valued McDonald’s earlier this year. I estimated that shares have an intrinsic value of just under $236/each. The stock has climbed quite a bit since I put out that video, but I don’t see the stock as extremely expensive right now, even though it is slightly ahead of what I’ve pinned as fair value. You could do a lot worse than pay a fair price, or even a slight premium, for a world-class business like McDonald’s.

— 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.