For decades, income-minded investors have searched for the best dividend stocks out there. In my experience, great dividend stocks have a few characteristics: strong fundamentals, increasing dividend distributions over time, and bullish trading activity in the shares.
The hallmark way I go about finding the best dividend stocks…the outliers is by looking for quiet Big Money trading activity. Oftentimes, that can be institutional activity. I’ll go over why following the Big Money is so important in a bit. But, the 5 stocks I see as long-term dividend growth candidates are MA, SHW, WSM, EBAY, & ORCL.
Over decades, I’ve learned that the true tell on great stocks is that big money consistently finds its way into the best companies out there… especially dividend paying stocks. Some of the biggest returns ever have come from holding stocks for many years and reinvesting dividends.
I want the odds on my side when looking for the highest quality dividend stocks…and I own many of them.
So, let’s get into it.
Up first is Mastercard Inc. (MA), which is a large credit card company. They’ve been raising their dividend for years.
Let’s first start with the technical picture.
When deciding on a strong candidate for long-term dividend growth, I look for stocks leading in price:
Below are the Big Money signals Mastercard has made since 2015. Blue bars are showing that MA was seeing big buy activity according to MAPsignals. Typically, the more Big Money signals, the stronger the stock:
On top of technicals, when deciding on the best dividend stock, you should look under the hood to see if the fundamental picture supports a long-term investment. As you can see, Mastercard has a strong dividend history:
Next up is Sherwin-Williams Co. (SHW), which is a leading seller of paint materials. They’ve also been a dividend grower for years.
When deciding on a strong candidate for long-term dividend growth, it’s a good idea to look for many years of dividend increases.
Now let’s look at the recent performance:
Below are the big money signals that Sherwin-Williams has made since 2015. I expect more buy signals in the years to come.
On top of technicals, when deciding on the best dividend stock, you should look under the hood to see if the fundamental picture supports a long-term investment. As you can see, Sherwin-Williams has a nice dividend history. Their earnings growth has been stellar as well:
Next, I’m looking at Williams-Sonoma, Inc. (WSM), which is a leading home retailer company. They have a solid dividend history.
When deciding on a strong candidate for long-term dividend growth, recent underperformance is not a bad thing:
Below are the big money signals that Williams-Sonoma has made since 2015. It’s recently showed a Big Money buy signal:
On top of technicals, when deciding on the best dividend stock, you should look under the hood to see if the fundamental picture supports a long-term investment. As you can see, WSM has a strong dividend history:
Next, I’m looking at eBay, Inc. (EBAY), which is a leading online auction marketplace. They recently added a dividend.
When deciding on a strong candidate for long-term dividend growth, recent outperformance is great:
Below are the Big Money signals that eBay has made since 2015.
On top of technicals, when deciding on the best dividend stock, let’s check up on the fundamentals. As you can see, eBay has recently started paying a dividend.
Lastly, I’m looking at Oracle Corp. (ORCL), which is a leading enterprise technology company. They’ve been growing their dividend for years.
When deciding on a strong candidate for long-term dividend growth, I like to look for recent leaders:
Below are the Big Money signals that ORCL has made since 2015.
On top of technicals, when deciding on the best dividend stock, you gotta see if the fundamental picture supports a long-term investment. Oracle has been a steady grower:
MA, SHW, WSM, EBAY, & ORCL represent solid dividend choices. Given the strong historical dividend growth and Big Money signals, these stocks could be worth an extra look for a dividend investor.
Disclosure: the author holds no positions in MA, SHW, WSM, EBAY, & ORCL at the time of filming.
To learn more about the MAPsignals process, click here: www.mapsignals.com
Lucas is a well-versed equity investor and educator. He currently is co-founder of research and analytics firm, MAPsignals.com, which focuses on finding outlier stocks by following the Big Money.