My Top Dividend Growth Stock to Buy in July and Hold Forever
Here's a 2.7% dividend yield that has been growing by 10%-plus annually -- and it's undervalued, too.
Overview
If you're seeking solid dividend-paying stocks for your portfolio, don't just look for the fattest dividend yields. For one thing, many high-yielding stocks are high-yielding simply because their stock prices have fallen hard -- very possibly for good reason. Also, it's important to focus not just on a dividend's size, but also its growth rate.
Imagine, for example, that you're thinking of investing in Company A or Company B. The yield for A is 3% and for B, 2%. It might seem smarter to invest in A, but if B's dividend payout is growing at a good clip, its yield could surpass that of A within a few years. Of course, you'll also want to evaluate much more than just dividend yields.
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Originally published at www.fool.com.