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10 Dividend Growth Stocks For May 2020

Published Fri, 29 May 2020 09:00:00 -0400 on Seeking Alpha

I rank a selection of dividend growth stocks in Dividend Radar and present the 10 top-ranked stocks for consideration.
To rank stocks, I use DVK Quality Snapshots to obtain quality scores and break ties by considering additional metrics.
This month, I'm presenting high-quality stocks with favorable Chowder numbers trading below fair value.

In my monthly series of 10 Dividend Growth Stocks, I rank a subset of Dividend Radar's list of dividend growth (DG) stocks. Dividend Radar is a weekly automatically generated spreadsheet listing stocks with dividend increase streaks of five years or more.
This month, I decided to rank high-quality DG stocks with a favorable Chowder Number (CDN) trading below fair value. I use DVK Quality Snapshots to assess the quality of DG stocks.
Screening and Ranking
The latest Dividend Radar list (dated May 22, 2020) contains 774 stocks.
I decided to screen for DG stocks with quality scores in the range 23-25 that are trading below my fair value estimates. Furthermore, I considered only stocks likely to generate annualized total returns of at least 8%, according to the Chowder Rule. These are pretty stringent screens, and only eleven DG stocks in Dividend Radar qualify.
Ranking by Quality
I use the scoring system of DVK Quality Snapshots to obtain quality scores, and consider the following factors as tie-breakers:
SSD Dividend Safety Scores S&P Credit Ratings Dividend Yield Each stock's Rank is shown in the tables that follow.
Fair Value Estimates
To estimate fair value, I reference fair value estimates and price targets from several sources, including Morningstar and Finbox.io. Additionally, I estimate fair value using the five-year average dividend yield of each stock using data from Simply Safe Dividends.
With several estimates and targets available, I ignore the outliers (the lowest and highest values) and use the average of the median and mean of the remaining values as my fair value... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
3M 170.58   20.6 8.28 5.76 3.41
AMGEN 194.00   15.4 12.62 5.80 2.95
CISCO SYSTEMS 49.93   19.2 2.60 1.40 2.85
PEPSICO 137.29   15.2 9.02 3.82 2.81
TEXAS INSTRUMENTS 130.22   23.8 5.47 3.08 2.42
UNION PACIFIC 167.71   19.9 8.42 3.88 2.32
MEDTRONIC 110.38   33.8 3.27 2.16 2.01
HONEYWELL INTERNATIONAL 168.63   17.9 9.44 3.28 1.93
ADP 160.41   30.6 5.24 3.16 1.92
UNITEDHEALTH GROUP 230.10   17.3 13.32 4.32 1.86
COMCAST 46.97   17.9 2.62 0.84 1.81

3M - MMM
3M - MMM  

Older articles featuring 3m (MMM):
3M Board Declares Quarterly Dividend
First-Half 2020 Dividend Checkup - Dividend Growth, Cuts, And Postponements
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Nicholas Ward's Dividend Growth Portfolio: July 2020 Update
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