4 Upgrades Dividend Growth Investors Need To Own

The first three months of the year really flew by!

We’re closing in on the start of the fiscal Q1 2021 reporting season and the upgrades keep rolling in.

Today let’s look at a group of stocks that are not only poised for sustained growth in the post-pandemic world… but ones that pay nice dividends and have a positive outlook for dividend growth.

With secular tailwinds to drive revenue, and the analyst community calling for higher share prices, these stocks are a no-brainer for investors in 2021.

Texas Instruments Positioned To Outperform In 2021 

Texas Instruments (NASDAQ: TXN) got a nod from Keybanc which called the stock out for its long-term growth potential. In their view, Texas Instruments’ decision not to increase prices in the face of a global microchip shortage is one that will drive market share gains in the near and long-term. That, coupled with the company’s supply-chain advantage, has it set up for widening margins and accelerating earnings as well. In our view, they had us with the words semiconductors and sealed the deal with widening margins and outperformance. The semiconductor sector is fundamental to nearly every industry on the planet at this point in the game and will be in high demand for years to come. As for the dividend, Texas Instruments pays a 2.2% yield with a 60% payout ratio, 21% distribution CAGR, and 15-year history of past increases. 

Domino’s Pizza Delivers Value To Shareholders 

Domino’s Pizza (NYSE: DPZ) was initiated with a Bull rating by Citibank even as competitor Papa John’s got called out by BMO Capital. According to Citibank, Domino’s has several growth drivers working for it even as the pandemic boost fades. In addition, Domino’s trades at an “undemanding” valuation compared to Papa Johns at only 28X earnings compared to Papa Johns’ 38X and we concur. Shares of Domino’s are yielding a little over 1.0% with prices near $370 which isn’t much but the payment is very safe. Domino’s payout ratio is sub-30% and the balance sheet is sound. With an 8-year history of dividend increases, a low payout ratio, and 20% CAGR we not only expect to see the 9th distribution increase but for it to be a large one. 

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