Dividend growth can be a great way to deal with stock inflation
Dividend growth strategies are undoubtedly one of the most popular ways to invest. This involves buying and holding shares of a company that pays standard dividends that are increasing their cash flow significantly each year in order to continuously increase their payments to shareholders. One of the big reasons why dividend growth has such a strong reputation among investors is that it actually works. Having a diversified portfolio of companies that are steadily increasing their payouts can help investors build substantial assets in the long run, especially if they decide to reinvest dividends on more shares over the years.
Dividend stocks have always attracted a fair share of buyers in almost any market environment, but this year such investments have become more attractive than ever due to persistent inflation concerns. Finding resources that can help fight inflation is certainly not easy given how many questions there are about the economy and whether the Federal Reserve can bring things under control quickly. That’s why we’ve put together the following list of 3 dividend growth stocks to help you fight inflation. Here are a few reasons why these companies stand out as great long-term buyers
FedEx Corporation (NYSE: FDX)
One particularly important detail about dividend growth investing is that it is important to select companies with strong business potential and reliable free cash flow production. That way, you can probably rely on them to continue rewarding long-term shareholders with increasing payments. This is a big reason for FedEx Corporation to be on your radar, especially since the stock has been hammered this year and it could be a great buying opportunity. FedEx is a blue-chip company that provides air freight and ground package services to businesses and businesses worldwide, along with truck freight and logistics services.
We know that FedEx will be busy for the next decade, thanks to e-commerce tailwinds, and the company’s huge international shipping network is both impressive and hard to imitate competitors. While it is true that FedEx is dealing with higher employee-related costs in the short term, it is difficult to argue against adding shares of an industry-leading company to such an attractive valuation. FedEx currently trades at a 9.9 forward P / E ratio, and the company’s management has recently increased its dividend by 15%, which is a great reason to consider adding shares. The stock is down more than 21% year-over-year, but MarketBeat’s consensus analyst estimates that the stock has an average price target of 2 302.52, up 48% from its current level, making it a very attractive option to consider.
AmerisourceBergen Corp (NYSE: ABC)
For all the complex reasons that are happening in the world, investors must think a lot about this year, which is why keeping things simple can be a good way to market at this time. Incidentally – AmerisourceBergen was one of the largest outperformers on the market in 2022, will not be significantly affected by the current geopolitical instability, and its growth direction has continued to grow, meaning the stocks are likely to continue trending higher. It is one of the largest pharmaceutical distributors in the country with annual US drug distribution revenues of over $ 210 billion and a company that investors can bank for continued dividend growth for next year.
Investors are likely to recognize the enormity of the pharmaceutical industry, and Amesource is one of three giant companies that act as pharmaceutical wholesale and distribution oligopoly, which is another strong point to consider. With a 10-year dividend growth rate (CAGR) of 13.9%, investors must be compelled to park some capital in this leading company in the long run. This makes it a more attractive option in a sector that has dramatically surpassed the market this year, so keep an eye out for pullbacks if you’re interested in adding shares.
Kinder Morgan Inc (NYSE: KMI)
The energy sector has been nothing short of impressive this year, which makes dividend growth stocks like Kinder Morgan even more attractive. It is one of the largest energy transport and storage companies in North America, important because of the sanctions imposed on Russia at the moment. Whether it is transportation, storage or processing of natural gas, crude oil, natural gas liquids and more, it is safe to say that Kinder Morgan plays a key role in the economy and has a successful business model that will help investors feel confident that dividends will increase. Will continue.
The stock currently yields a 5.68% dividend yield and some analysts expect to resume a share buyback program this year, which is certainly a strong reason to consider adding shares. Investors should also be happy to hear that Kinder Morgan has repaid more than $ 12 billion in debt since 2015, freeing up huge amounts of capital to support revenue and dividend growth.
FedEx is part of the Entrepreneur Index, which tracks some of the largest publicly traded companies established and operated by entrepreneurs.