I focus on, and personally invest in, high-quality dividend growth stocks. Why? Perhaps the better question might be, why not? These are some of the very best stocks in the whole world.

They represent equity in world-class businesses that pay reliable, rising dividends. These are, quite frankly, the companies that make the world go round. And in doing so, they make a lot of money.

Money which they share directly with their shareholders, in the form of safe, growing dividends.

That said, not all dividend growth stocks are good investments at all times. Which is what brings me to the point of this article.

Today, I want to tell you my top five dividend growth stocks for November 2021. Ready? Let’s dig in.

My first dividend growth stock pick for November 2021 is Allstate (ALL).

Allstate is a property-casualty insurance company.

This $37 billion (by market cap) company operates in one of my favorite industries of all – insurance. Insurance is fantastic because, first of all, it’s often required by law. That’s a captive customer base right there. With a 3.6% CAGR for revenue and a 28.9% CAGR for EPS over the last decade, this company just continues to spit out great growth, despite it flying way under the radar.

Guess what great business growth means? Yep. Great dividend growth.

Allstate has increased its dividend for 11 consecutive years. Honestly, I think they’re just getting started. The 10-year DGR of 10.2% is impressive enough. However, their most recent dividend increase was a whopping 50%! On top of the growth, the stock offers a market-beating yield of 2.6%. And with a payout ratio of only 25.9%, this dividend is positioned incredibly well to continue growing at a very high rate for years to come.

This stock is up 14% on the year, but I think there’s plenty more where that came from.

I analyzed and valued Allstate in early October, showing why shares could be worth nearly $150/each. This name is currently at under $124/share, so there’s a lot of potential upside here. And while you wait for that upside to unfold, you’re collecting that market-beating yield growing at a double-digit rate.

My second dividend growth stock pick for November 2021 is Atmos Energy (ATO).

Atmos Energy is an American natural gas utility business.

With energy shortages across Europe and Asia playing out over the last few months, a basic truth has suddenly dawned on people: Our modern-day society cannot function without cheap, reliable energy. That’s just reality. And Atmos Energy, with its $12 billion market cap, is involved in providing cheap, reliable energy to millions of people, primarily in the state of Texas. While revenue is down over the last decade, largely due to a number of business sales and restructurings, EPS has grown at a compound annual rate of 8.9% over that time frame.

And Atmos Energy is all too happy to share that growth directly with their shareholders.

Indeed, they pay a large, growing cash dividend straight to their investors. They’ve increased their dividend for 37 consecutive years, which makes them a vaunted Dividend Aristocrat. The five-year DGR is 8.1%, which is in line with EPS growth. Plus, the stock offers a rather appealing yield of 2.7% here, which easily beats the market. And the dividend is protected by a moderate payout ratio of 47.3%, indicating many more dividend increases to come.

This laggard is down 2% YTD, and that’s where the opportunity might be.

If you bought this stock a while ago, that performance is a bit of a bummer. But if you’re looking to buy now, that existing shareholder pain could be your gain, since it gives you a cheaper price to buy in at. I analyzed and valued Atmos Energy in late October, estimating that the business is worth nearly $107/share. With shares trading hands for about $92/each, that potential gap between price and value could be a gift.

My third dividend growth stock pick for November 2021 is Digital Realty Trust (DLR).

Digital Realty Trust is a global real estate investment trust that owns and operates data centers.

You know what I’ve never heard anyone say? That humanity’s future is going to be less reliant on technology. Data centers have a huge role to play in that future. And so Digital Realty Trust, as a major owner and operator of said data centers, with a $46 billion market cap, is positioned extremely well to grow its revenue and profit. Already, their revenue sports a CAGR of 15.6% over the last decade. FFO/share has a CAGR of 2.6% over that time period, even with an abnormal 2020.

Data centers? Or dividend centers? You be the judge.

Data centers have been money for this company. And they’ve been money for the shareholders, too. The company has increased its dividend for 17 consecutive years, with a 10-year DGR of 8.6%. Along with that high-single-digit dividend growth comes the stock’s current yield of 2.9%. You’re getting a yield-and-growth combination here that’s well into the double digits. The payout ratio, at 71.6%, shows no signs of the dividend growth letting up, either.

The stock is up about 17% this year, but the valuation still looks reasonable.

I don’t see anything expensive about this stock, despite the compelling business model and strong dividend metrics. I analyzed and valued Digital Realty Trust only weeks ago, showing why shares might just be worth about $155/share. Well, this name was priced at less than $148/share when my video came out. It’s had a nice pop since then, and we’re now at about $158/share. Still, it’s a great business model. And you could do a lot worse than pay a fair price for a business like this.

My fourth dividend growth stock pick for November 2021 is Gilead Sciences (GILD).

Gilead Sciences is a biopharmaceutical company.

Gilead Sciences, with its $81 billion market cap, gets no love from the market. However, love can be expensive. And as Warren Buffett once said: “You pay a very high price in the stock market for a cheery consensus.” Despite the lack of love for the stock, the business continues to march forward and grow. They’ve increased revenue at a CAGR of 12.8% and EPS at a CAGR of 16.7% over the last decade. These are great numbers.

Those great numbers translate over to the dividend, too.

Gilead Sciences has increased its dividend for seven consecutive years. And the three-year DGR is 9.4%. That’s nearly double-digit dividend growth. And the stock offers a yield of 4.4% here, which runs circles around the broader market’s yield. With a payout ratio of 40.1%, I see this dividend headed even higher.

The stock is up only 8% this year, despite very good results from the business.

The business continues to do quite well, even while the stock doesn’t. That business-stock bifurcation is precisely why I’m highlighting it. If the stock were expensive, I wouldn’t be talking about it. And investors would be complaining about overvaluation. Instead, this stock looks cheap. My recent analysis and valuation video, which went live only a few days ago, showed why this name could be worth about $75/share. Shares now trading hands for less than $65/each. This unloved dividend growth stock might deserve a little more love than it’s getting.

My fifth dividend growth stock pick for November 2021 is VF Corp. (VFC).

VF is a worldwide apparel and footwear company.

Even though this is a $29 billion (by market cap) company, VF is definitely not a household name. However, many of its brands are. Think Supreme, The North Face, Timberland, and Vans. I imagine a lot of companies out there would love to have just one of these brands. Now, revenue is flat over the last decade. And EPS is down by nearly 50%. However, that’s due to the pandemic effects and a major spin-off. Meanwhile, CFRA is predicting that VF will compound its EPS at an annual rate of 31% over the next three years as the business fully recovers. We invest in where a business is going, not where it’s been.

Of course, we also invest for those juicy dividends.

And juicy is just what you get here. VF has increased its dividend for 48 consecutive years. That’s pretty much unheard of in the apparel space, where trends come and go like the wind. The five-year DGR of 9% is paired with the stock’s current yield of 2.7%. I like that combination. I also like the payout ratio, which is 61.3%. This is another dividend that’s positioned to grow like clockwork over the coming years.

This name is down nearly 15% this year, and I think the market is getting it wrong.

But would you rather pay more than less for the same stock? Of course not. The combination of high quality and low valuation is why we’re here. I analyzed and valued VF about a month ago, showing why shares could be worth almost $77/each. When that video was released, shares were going for about $68/each. The stock is now priced at nearly $73, so it’s had a nice run. But I still view it as undervalued. Meanwhile, the company is poised to benefit from the sudden surge in demand for white Vans slip-on shoes stemming from Squid Game mania. The shoes are hot. The stock could soon turn hot, too.

— 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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