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Investing Insights: Unveiling 2 Promising Dow Jones Dividend Growth Stocks

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Delving into the heart of the stock market lies the renowned Dow Jones Industrial Average, fondly referred to as the Dow, which meticulously tracks the performance of 30 titan companies across various sectors of the U.S. economy.

Regarded as a prominent indicator, the Dow captivates investors, showcasing the robustness of the U.S. stock market. In the current epoch of 2024, the Dow has made a modest ascent of approximately 3.48%, trailing behind the broader S&P 500 index, which has soared impressively by 7.66% thus far.

A roll of U.S. currency next to a sticky pad that reads Dividends.

Image source: Getty Images.

Despite the Dow’s slight lag, a select few Dow stocks are glowing brightly as appealing investments currently. Among these shining stars are the electronic payments magnate Visa (NYSE: V) and the colossal beverage entity Coca-Cola (NYSE: KO).

Cherished in the portfolio of the legendary investor Warren Buffett, these two juggernauts boast wide economic moats, unwavering dividend growth trajectories over extensive periods, and robust earnings prowess.

Let’s embark on a closer examination of these two exceptional Dow dividend growth stocks and unravel why they merit inclusion in your investment arsenal.

Exploring the Case for Visa

Visa, the juggernaut in electronic payments, earns its place in most portfolios owing to its formidable economic moat, exponential dividend growth rate, and premier position in a swiftly expanding market.

While Visa’s shares command a premium (trading at over 32 times earnings) and its dividend yield of 0.73% falls below the large-cap U.S. stock average, the stock’s value remains palpable for two clear reasons.

  1. Growth in Dividends: Visa showcases one of the fastest dividend growth rates in the market. In the last five years, the company elevated its dividend payouts by an enticing 15.7% annually on average.
  2. Snowball Effect: Bolstered by its surging dividend growth rate and stellar long-term growth potential, Visa sets the stage for a potential β€œsnowball effect,” yielding exponential returns owing to the prowess of compounding.

Given these attributes, Visa emerges as a standout choice among today’s dividend growth stocks.

Why Coca-Cola Deserves a Spot in Your Portfolio

Coca-Cola, a dominant force in the non-alcoholic beverage industry, holds a broad economic moat, attributed to its robust and diverse brand portfolio. Its brand supremacy enables premium pricing and fosters strong ties with retailers.

By leveraging its expansive global distribution network reaching over 200 countries, along with a focus on innovation, Coca-Cola is primed to achieve revenue growth in the mid-single digits over the forthcoming decade, as outlined by analysts tracking the stock.

On the dividend front, Coca-Cola has escalated its shareholder dividend payouts for an impressive 62 consecutive years, offering an attractive yield of 3.26% at present.

While Coca-Cola’s dividend growth rate over the past five years at 3.92% might not match Visa’s, it stands as a commendable feat for a maturing global player. Trading at approximately 24 times earnings, Coca-Cola’s shares strike a balanced chord between affordability and top-tier dividend growth potential.

An amalgam of consistent growth, sturdy dividends, and brand dominance makes Coca-Cola an enthralling prospect for long-term investors, promising a delightful return on investment.

Considering an investment of $1,000 in Visa?

Prior to venturing into investing in Visa, ponder this:

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George Budwell holds no stake in any of the aforementioned stocks. The Motley Fool has positions in and recommends Visa. The Motley Fool maintains a disclosure policy.

The perspectives and opinions articulated herein are the author’s and do not necessarily mirror those of Nasdaq, Inc.

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