In a landscape where high-yield traps and low-yield growth opportunities abound, achieving portfolio balance can be tough. Will you select a 5.5% yield that may remain stagnant or a 1.2% yielder that increases by 10% each year?
Fortunately, there’s a compromise: balanced dividend growers.
These are firms with yields ranging from 2% to 5%—sufficient for income requirements while providing enduring dividend growth backed by earnings and revenue.
At Dividend Stocks Rock (DSR), we emphasize the Dividend Triangle:
– Revenue Growth
– Earnings Per Share Growth
– Dividend Growth
To qualify for this list, companies need to satisfy four criteria:
– Dividend Yield between 2% and 5%
– 5-Year Dividend Growth of no less than 5%
– DSR Pro Rating of 3 or above
– Dividend Safety Score of 3 or above
This serves not as a buy list but as a shortlist to enhance your research. It comprises U.S. and Canadian firms, categorized by country, accompanied by business summaries and both bull and bear cases for assessment.
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**Top U.S. Balanced Dividend Growers**
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**Comcast (CMCSA)**
**Yield:** 3.71%
**What it does:** Comcast is engaged in broadband, cable television, and media, owning NBCUniversal and Sky, alongside the streaming service Peacock.
**Bull Case:** Revenue streams are diversified across broadband, content creation, and international ventures. Investments in streaming and infrastructure indicate potential long-term growth. Earnings persist in climbing, despite stagnant revenue.
**Bear Case:** The cable television sector is declining due to cord-cutting. Growth in streaming may not compensate for losses in cable revenue. Elevated capital expenditures, coupled with flat revenue, could hinder future earnings growth.
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**Genuine Parts (GPC)**
**Yield:** 3.22%
**What it does:** Parent company of NAPA Auto Parts and Motion Industries, distributing replacement components for automobiles and machinery.
**Bull Case:** This stable business remains crucial across economic cycles. Over 10,000 locations support repair shops and manufacturers. As vehicles age, demand rises. The company is expanding through acquisitions and embracing digital transformation.
**Bear Case:** The cyclical nature may expose it to recession threats, risks associated with European expansion, and potential challenges in adapting to electric vehicle advancements.
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**PepsiCo (PEP)**
**Yield:** 4.32%
**What it does:** A frontrunner in beverages and snacks, owning brands such as Gatorade, Frito-Lay, and Quaker.
**Bull Case:** Robust branding and a strong distribution network. Expanding into healthier product lines and e-commerce. Retail presence grants pricing leverage.
**Bear Case:** Trends favoring healthier foods could jeopardize traditional products. Rising input costs and supply chain challenges might impact profit margins. Sales and earnings growth remains dormant.
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**AbbVie (ABBV)**
**Yield:** 3.55%
**What it does:** A global biopharmaceutical firm recognized for Humira, Skyrizi, Rinvoq, and Botox.
**Bull Case:** Effectively positioned for Humira successors. Boasts a strong portfolio in aesthetics, neuroscience, and immunology with international expansion possibilities.
**Bear Case:** The loss of exclusivity for Humira was significant. Reliance on a few blockbuster medications poses risks. Substantial R&D investments are necessary to sustain its current standing.
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**Top Canadian Balanced Dividend Growers**
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**Quebecor (QBR.B.TO)**
**Yield:** 3.71%
**What it does:** Quebec-based telecom and media entity, owner of Videotron and TVA, and recently acquired Freedom Mobile.
**Bull Case:** Dominant within Quebec and expanding nationally. Vertical integration creates synergies.
**Bear Case:** Heavy dependency on Quebec. Media division has slow growth; external expansion faces fierce competition.
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**Canadian Tire (CTC.A.TO)**
**Yield:** 4.22%
**What it does:** Operates Canadian Tire, SportChek, Mark’s, and financial services via CT REIT.
**Bull Case:** Strong private labels coupled with real estate offer pricing leverage. Financial services provide reliable income.
**Bear Case:** Subject to the Canadian consumer and retail conditions. Faces competition from e-commerce. While diversified, growth is moderate and demands flawless execution.
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**BMO (BMO.TO)**
**Yield:** 4.41%
**What it does:** A leading Canadian bank with significant exposure in the U.S. after acquiring Bank of the West.
**Bull Case:** Growth prospects in wealth management and ETFs across both nations. Solid capitalization and cost management.
**Bear Case:** High provisions for credit losses following the acquisition. Earnings face short-term pressure amid economic uncertainty.
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**Capital Power (CPX.TO)**