While there really is no “secret sauce” for investing in dividend growth stocks, here are some basic tips to go along with my article on How To Choose The Best Dividend Stocks.
- Real estate investment trusts with a funds-from-operations payout ratio below 85%.
- Higher-growth common stocks that pay out less than 50% of free cash flow (FCF).
- Banks that pay out less than 60% of FCF.
- Regulated utilities that pay out less than 80% of FCF.