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Stocks of Substance: Seeking Dividend Growth in April 2024

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Dividends, the steady drumbeat of income for investors, are a financial compass guiding one to the promised lands of financial growth. In the dynamic world of stocks, the best dividend growth stocks for April are the veritable treasure troves waiting to be unearthed.

Amid the labyrinth of investment choices, two guiding stars shine bright. Firstly, stability is key – the bedrock of sustainable dividend growth glimmers only in industries unfazed by economic tempests. While cyclical companies may offer lofty yields, their dividends are castles built on shifting sands, prone to crumble in economic squalls.

Secondly, longevity is the hallmark of champions. The Trio we unveil, boasting a forward dividend yield exceeding 2%, have a cumulative record of over a decade of dividend growth. More impressively, their annual dividend growth has danced gracefully above the 10% mark for the last half-decade.

These stellar stocks, trading modestly below the market’s 21 times earnings threshold, are the lighthouses illuminating the path to portfolio prosperity.

A Shining Beacon: NextEra Energy (NEE)

Nextra Energy (NEE) website on a mobile phone screen

Source: madamF / Shutterstock.com

An exemplary paragon of regulated utility prowess intertwined with a burgeoning renewable energy arm, NextEra Energy (NYSE:NEE) dazzles with a forward dividend yield of 3.25%. Its legacy encompasses an unmatched 28-year streak of dividend increments.

With a 10.8% five-year dividend growth rate, this record of renewable expansion is poised to endure. Anchored by the moat of Florida Power & Light Company, the largest electric utility in the U.S., with its monopoly in Florida, NextEra commands prices that promise robust returns on capital.

Furthermore, as the foremost producer of solar and wind energy via NextEra Energy Resources, the company holds prime acreage for renewable power generation. Amidst long-term power purchase agreements laden with escalating terms, their renewable arm stands as a beacon of guaranteed returns.

Buoyed by the steadfastness of their Floridian utility business and the winds of growth propelling their renewable exploits, NextEra shines as a coveted dividend growth stock. With a payout ratio shy of 60%, ample room exists for future dividend luxuriance.

The Global Delight: Mondelez International (MDLZ)

A zoomed in image of one Oreo cookie leaning on another Oreo cookie with cookie crumbles in front and a white background.

Source: DenisMArt / Shutterstock.com

In the realm of snacking, where gastronomic joy transcends financial stature, Mondelez International (NASDAQ:MDLZ) reigns as an unassailable juggernaut. Priced at 20 times forward earnings and boasting a modest forward dividend yield of 2.4%, it beckons as an essential acquisition.

A global titan with 70% of its revenues originating beyond U.S. shores, Mondelez flaunts a cornucopia of beloved brands garnishing prime retail real estate.

Dominance is its birthright. With a 17% market share in biscuits and 13% in confectionery, Mondelez’s marquee brands underpin a saga of demand growth and market supremacy. Witness a five-year revenue surge at a compounded annual clip of 6.7% amid volume upticks and price hikes.

As its consumer allure flourishes around stalwart brands like Oreo and Cadbury, Mondelez’s profit engine purrs with operating margins exceeding 15% over the last quintet of years.

Presently, Mondelez sports a 48% payout ratio, anticipates organic sales growth of 3%-5% in fiscal year 2024, and foresees elevated adjusted EPS expansion. Such forecasts allude to a prolonged reign of dividend expansion, casting Mondelez as an appetizing prospect for dividend growth aficionados.

The Resilient Titan: Target (TGT)

tgt stock

Source: Sundry Photography / Shutterstock.com

Target (NYSE:TGT) stands as a commercial colossus, a veritable David holding off the Amazonian Goliath with unwavering resolve. By curating a delightful in-store experience and an expansive array of essential goods, home essentials, and apparel, Target retains the consumer’s affection. Simultaneously, it fortifies its omnichannel repertoire to cater to the digital denizens.

Nary has a retailer struck such a chord as Target. Despite a 1.6% fiscal year 2023 sales reverberation, the figures resonated 37% above fiscal year 2019’s cadence.

More profoundly resonant is Target’s dividend saga. A venerable aristocrat, it has consecutively raised its dividend for 55 years. Carried aloft on earnings’ wings, the dividend has soared with an 11.5% annual uplift over the past half-decade. As of now, it yields 2.47% with a meager 48.8% payout ratio.

Fundamentally, Target stands as a compelling prospect at current valuations. With the clouds of shrinkage and inventory tribulations dissipating over the past biennium, fiscal year 2023’s soaring GAAP EPS of $8.94 heralded a drastic escalation from $5.98 in fiscal year 2022. Projections suggest even rosier prospects for 2024.

On the dawning of this publication, Charles Munyi did not harbor any positions related to the securities mentioned. The views articulated herein are the musings of the scribe, guided by the InvestorPlace.com Publishing Guidelines.

Charles Munyi regales in scribal exploits across multifarious domains including personal finance, insurance, technology, wealth management, and stock investing. His quill has graced a variety of financial pages, from Benzinga to The Balance and Investopedia.

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The post The 3 Best Dividend Growth Stocks to Buy in April 2024 appeared first on InvestorPlace.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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