25 High Quality Dividend Growth Stocks With Highest Expected Year Ahead Total Return

We seek consistent, persistent dividend growth opportunities among high quality stocks. As part of our continuing search, we did this simple filter today to identify a field of stocks within which to look more deeply. This article shares the output of that filter, which you may find saves you time in your own opportunity search.

Different investors will come to different conclusions about which stocks are attractive and which are unattractive. At a minimum momentum oriented investors will find those stocks that have not moved much or that are well below their highs to be unattractive. Conversely, value investors may be attracted to some stocks that momentum investors would shun.

Here is what we required of companies:

  • S&P earnings and dividend quality A+, A, A- or B+
  • dividend yield >= 2.03 (the SPY yield)
  • 5-yr dividend growth rate >= 0
  • dividend paid and increased each year for at least 5 years

There were 164 companies that passed that test.

We then estimated a plausible year ahead total return by calculating the percentage price change required to reach the consensus year ahead average target price, and adding to that the current yield. No growth in the dividend was assumed in that summation.

Based on that calculation, the 25 stocks with the highest year ahead total return expectation are as follows (listed from highest to lowest):

(JCS) Communications Systems
(WEYS) Weyco Group Inc.
(MPR) Met-Pro Corporation
(CAT) Caterpillar Inc.
(ACU) Acme United Corp.
(PBI) Pitney Bowes Inc.
(OXY) Occidental Petrol
(RBCAA) Republic Bancorp
(NRP) Natural Resources
(DGAS) Delta Natural Gas
(NUS) Nu Skin Enterpris
(MDP) Meredith Corp.
(R) Ryder System Inc
(AFL) AFLAC Incorporate
(RBA) Ritchie Bros. Auctioneers
(CHRW) C.H. Robinson Worldwide
(DE) Deere & Company
(QCOM) QUALCOMM
(ABM) ABM Industries
(SJW) SJW Corporation
(HCSG) Healthcare Services
(CR) Crane Company
(EMR) Emerson Electric
(ADI) Analog Devices
(MCHP) Microchip Technology

This is a view of those 25 stocks showing their quality ratings, current yield, 5-year dividend growth rate, the percentage price change to reach the target price, the expected total return, and also the percentage distance of the current (2013-04-19) price from the trailing intra-day highs for 3 months, 1 year, 3 years, and 5 years:

(click to enlarge)

expectedTRtop25

The full spreadsheet of the information for the 164 names that passed the filters is available at this link to those who join our opt-in email list to receive occasional commentaries.

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