- Some investors maybe worried about interest rate hikes.
- Lower-yielding companies with estimated high earnings growth will likely be less affected by interest rate hikes compared to high-yielders.
- These 5 companies could help complement the blue chip dividend payers in a dividend growth portfolio.
With the interest rate hike matter looming, investors might opt to look for investments which pay a lower yield, but have higher expected earnings growth rates.
If you’re looking for total return in investments and are not concerned about the immediate dividend income, here are 5 businesses for consideration. They are all expected to grow earnings at a rate of 10% or higher per year in the near future.
I placed them from lowest expected earnings growth to highest, assuming it’s easier to achieve lower growth than higher. So the companies appearing first are more likely to achieve their expected earnings growth. Additionally, they’re all expected to grow dividends at least 10% per year in the foreseeable future.
- Enbridge Inc (TSX:ENB)(NYSE:ENB) with 3% yield and 10-12% expected earnings growth.
- Gilead Sciences, Inc. (NASDAQ:GILD) with 1.5% yield and 11% estimated earnings growth.
- Union Pacific Corporation (NYSE:UNP) with 2.1% yield and 11% estimated earnings growth.
- Johnson Controls Inc (NYSE:JCI) with 2% yield and 12% expected earnings growth.
- Cummins Inc. (NYSE:CMI) with 2.2% yield and 15% estimated earnings growth.
To learn more about each of these companies, check out the Seeking Alpha article at 5 Dividend Companies With 10-15% Growth.
These companies are relatively high growth possibilities in a dividend portfolio to complement blue chips such as Emerson Electric (NYSE:EMR), Johnson & Johnson (NYSE:JNJ), and Procter & Gamble (NYSE:PG).
Their dividend growth rates serve as a gauge on whether the business is doing well. It goes without saying that these growing dividends should be supported by growing earnings and sustainable payout ratios. Consistent cash flow generation helps too.
If you like what you've just read, consider subscribing via the "Subscribe Here" form at the top right so that you will receive an email notification when I publish a new article.Disclosure: At the time of writing, I am long NASDAQ:GILD, NYSE:UNP, and TSX:ENB.
Disclaimer: I am not a certified financial advisor. This article is for educational purposes, so consult a financial advisor and or tax professional if necessary before making any investment decisions.
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