Finding Diamonds In The Rough: Uncovering Dividend Gems

Irrespective of market sentiment, investors often turn to secure stocks for stability, particularly in challenging market conditions. Enter the steadfast allure of dividend stocks, offering both a shield against volatility and a steady stream of income.

On the lookout for reliable dividend investments? We've compiled a list of top 5 stocks that have not only maintained annual dividend increases over the past years but also offer attractive yields. These picks boast long-term dividend stability and positive future outlook, making them noteworthy options.

Our Diamond-Polishing Criteria

Here's what sets our dividend screener apart:

1. Strong dividend CAGR growth: Sustaining a robust compound annual growth rate (CAGR) of dividends over the past five years.

2. Increasing gross profit margins: Demonstrating operational efficiency and revenue growth.

3. Robust average 5-year free cash flow margin: Ensuring ample resources to sustain and fuel future dividend increases.

4. Prioritising stability and sustainability of dividends: Minimizing risk of unexpected cuts.

5. Top-Tier dividend yields: Maximising income potential.

6. Impressive growth outlook: Promising a reliable income stream.

Now, let’s take a look at some of the the diamonds that have cut through the rough: 

1. KeyCorp (NYSE:KEY) - This diversified financial titan excels in retail and commercial banking, catering to individuals and small-to-medium businesses. Beyond deposits and lending, KeyCorp shines in wealth management, asset management, and business advisory services. Recent strength in net interest income and positive operating leverage paint a promising picture for stable dividends and future growth.
   
   
2. Western Midstream Partners (NYSE:WES) - Navigating the dynamic energy landscape, Western Midstream stands tall as a leader in midstream operations. From gathering and processing natural gas to managing condensate and NGLs, their extensive footprint across key regions ensures consistent revenue streams. Recent achievements like increased throughput volumes and strategic acquisitions like Meritage Midstream solidify their position for continued growth and attractive dividend payouts.

3. Peoples Bancorp (NASDAQ:PEBO) - Holding the crown for strongest deposit market share in rural markets across three states, Peoples Bancorp boasts a strategic positioning near major cities, capitalizing on diverse lending opportunities. Beyond traditional banking, they offer insurance and equipment leasing, diversifying their revenue streams. A robust financial foundation coupled with emphasis on risk management and credit quality further strengthens their appeal as a reliable dividend-paying institution.

4. U.S. Bancorp (NYSE:USB) - This financial powerhouse offers a comprehensive suite of services, from corporate and commercial banking to wealth management and beyond. Their recent acquisition of Union Bank strategically expands their reach and unlocks growth potential. With relief from regulatory constraints and accelerated CET1 accretion, U.S. Bancorp is poised to deliver both stable dividends and future upside.

5. Altria Group (NYSE:MO) - The iconic Marlboro brand isn't the only star in Altria's constellation. While tobacco remains a cornerstone, their diversification efforts with cigars, pipe tobacco, and even emerging nicotine pouches showcase a commitment to adapting to evolving consumer preferences. 58 consecutive years of dividend increases, coupled with recent share repurchases, cement Altria's dedication to maximizing shareholder value through dividends and capital appreciation.

These five "Dividend Diamonds" are just a glimpse into the treasure trove of reliable income opportunities available amidst market uncertainty. Doing thorough research and having an understanding of your own risk tolerance is essential before making any investment decision.

Armed with the right tools and unwavering focus on stability and growth, you can navigate the choppy waters and find your own glittering dividend gems. Are you prepared to uncover some dividend gems independently? Consider trying out our latest screener for a tailored experience. Alternatively, you can also explore fresh investing ideas to enrich your investment portfolio.

Simply Wall St analyst Kshitija Bhandaru and Simply Wall St have no position in any of the companies mentioned. This article is general in nature. It does not constitute a recommendation to buy or sell any stock and does not take account of your objectives, or your financial situation. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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