In this article, we discuss 5 best dividend growth stocks to buy in August. If you want to read our detailed analysis of dividend growth stocks and their performance, go directly to read 10 Best Dividend Growth Stocks to Buy in August.
5. PepsiCo, Inc. (NASDAQ:PEP)
Dividend Yield as of August 7: 2.64%
Years of Consistent Dividend Growth: 49
A multinational beverage company, PepsiCo, Inc. (NASDAQ:PEP) deals in the manufacturing, marketing, and distribution of its products. Since the start of 2022, the stock gained 0.91% while its 12-month returns came in at 13.09%, as of the market close of August 6.
In Q2 2022, PepsiCo, Inc. (NASDAQ:PEP) reported an operating cash flow of over $2 billion, up from $174 million in the previous quarter. The company’s free cash flow for the quarter came in at over $1.07 billion, growing from $696 million in Q1 2022. Its net revenue grew by 7% year-to-date and 5.2% quarter-over-quarter. PepsiCo, Inc. (NASDAQ:PEP) holds one of the strongest dividend growth histories, raising its payouts consistently for the past 49 years. It pays a quarterly dividend of $1.15 per share, with a yield of 2.64%, as of August 7.
In August, Morgan Stanley raised its price target on PepsiCo, Inc. (NASDAQ:PEP) to $198 with an Overweight rating on the shares, appreciating the company’s distribution agreement with Celsius.
At the end of March 2022, 62 hedge funds in Insider Monkey’s database owned stakes in PepsiCo, Inc. (NASDAQ:PEP), down from 60 in the preceding quarter. The collective value of stakes owned by hedge funds stood at over $4.8 billion.
ClearBridge Investments mentioned PepsiCo, Inc. (NASDAQ:PEP) in its Q4, 2021 investor letter. Here is what the firm said:
“The pandemic created opportunities for us to be more aggressive in a variety of areas of the market. We were opportunistic throughout the year. After a strong year for equities, we sought to bolster more defensive areas of the portfolio and added to PepsiCo, increasing our exposure to a high-quality and stable name.”
4. Bristol-Myers Squibb Company (NYSE:BMY)
Dividend Yield as of August 7: 3.00%
Years of Consistent Dividend Growth: 16
Bristol-Myers Squibb Company (NYSE:BMY) is a New York-based multinational pharmaceutical company. The stock delivered a 271.3% return to shareholders in the past five years and gained 7.03% in the last year.
Bristol-Myers Squibb Company (NYSE:BMY) generated $15.2 billion in free cash flow in FY21, up from $13.3 billion in the last year. The company’s operating cash flow grew to $16.2 billion, from $14 billion FY20. Bristol-Myers Squibb Company (NYSE:BMY) pays a quarterly dividend of $0.54 per share. The company has been raising its dividends consistently for the past 16 years. Its dividend payments are covered by its payout ratio of 70%. As of August 7, the stock’s dividend yield was recorded at 3.00%.
Following the company’s recent quarterly earnings, JPMorgan lifted its price target on Bristol-Myers Squibb Company (NYSE:BMY) in July to $85 with an Overweight rating on the shares.
The number of hedge funds tracked by Insider Monkey owning stakes in Bristol-Myers Squibb Company (NYSE:BMY) grew to 70 in Q1 2022, from 66 in the previous quarter. These stakes hold a consolidated value of over $2.43 billion. Two Sigma Advisors owned the largest stake in the company in Q1, worth $318.4 million.
Carillon Tower Advisers mentioned Bristol-Myers Squibb Company (NYSE:BMY) in its Q1 2022 investor letter. Here is what the firm has to say:
“Stock selection contributed the most while sector allocation was also positive. An underweight to communication services and an overweight to energy helped performance, while an underweight to consumer staples and an overweight to materials detracted. Stock selection was strong within healthcare and materials but was weak within information technology and industrials. Bristol-Myers Squibb (NYSE:BMY), the biopharmaceutical company, entered into accelerated share repurchase agreements.”
3. Extra Space Storage Inc. (NYSE:EXR)
Dividend Yield as of August 7: 3.04%
Years of Consistent Dividend Growth: 12
Extra Space Storage Inc. (NYSE:EXR) is a Utah-based real estate investment trust company that mainly invests in self-storage units. The stock has delivered sound returns to shareholders since its IPO in 2004, gaining 1,477%. It gained 158.4% in the last five years, as of the close of August 6.
In FY21, Extra Space Storage Inc. (NYSE:EXR) reported an operating cash flow of $952.4 million, compared with $771.2 million in FY20. The company’s free cash flow stood at $948.7 million, up from $764 million in the previous quarter. It announced its Q2 results on August 2, ending the quarter with $58.7 million available in cash and cash equivalents, with total assets worth over $11 billion.
In February 2022, Extra Space Storage Inc. (NYSE:EXR) hiked its quarterly dividend by 20% to $1.50 per share. This was the company’s 12th consecutive year of dividend growth. It has a 5-year dividend CAGR of 8.7% and a payout ratio of 73%. As of August 7, the stock’s dividend yield was recorded to be at 3.04%.
In June, JPMorgan upgraded Extra Space Storage Inc. (NYSE:EXR) to Overweight, with a $193 price target. The firm believed that the company is expected to generate above-average net operating income growth for the REIT sector.
As per Insider Monkey’s Q1 2022 database, 29 hedge funds owned $327.6 million worth of stakes in Extra Space Storage Inc. (NYSE:EXR). In the previous quarter, 27 hedge funds held positions in the company, with stakes valued at over $252.4 million.
2. The Clorox Company (NYSE:CLX)
Dividend Yield as of August 7: 3.40%
Years of Consistent Dividend Growth: 50
An American manufacturing company, The Clorox Company (NYSE:CLX) has been raising its dividends consistently for the past 50 years. The company pays a quarterly dividend of $1.18 per share, which was raised 1.7% in July. The stock’s dividend yield stood at 3.40%, as of August 7.
The Clorox Company (NYSE:CLX) has experienced solid earnings over the years, generating $945 million in free cash flow in FY21. The company’s operating cash flow for the fiscal year came in at over $1.27 billion. In its fiscal Q4 2022, the company had $183 million in cash and cash equivalents with total assets of over $6 billion.
In August, Credit Suisse lowered its price target on The Clorox Company (NYSE:CLX) to $130 because the company is faced with supply chain issues due to the ongoing political tensions. However, the firm maintained its Overweight rating on the stock.
As of the end of Q1 2022, 26 hedge funds tracked by Insider Monkey reported owning stakes in The Clorox Company (NYSE:CLX), down from 39 in the previous quarter. The collective value of these stakes is roughly $570 million. Renaissance Technologies was the company’s largest stakeholder in Q1.
1. 3M Company (NYSE:MMM)
Dividend Yield as of August 7: 4.04%
Years of Consistent Dividend Growth: 64
A Minnesota-based multinational manufacturing corporation, 3M Company (NYSE:MMM) reported an operating cash flow of $1.2 billion in Q2 2022, up from $1 billion in the previous quarter. The company’s free cash flow came in at $743 million, compared with $587 million in the preceding quarter. It paid 83% of its net income in dividends during the quarter, amounting to over $800 million.
3M Company (NYSE:MMM) pays a quarterly dividend of $1.49 per share. The company has a 64-year track record of consistent dividend growth and a 5-year dividend CAGR of 5.38%. As of August 7, the stock’s dividend yield stood at 4.04%.
At the end of Q1 2022, 51 hedge funds owned stakes in 3M Company (NYSE:MMM), up from 41 a quarter earlier, as shown by Insider Monkey’s database. The stakes owned by hedge funds hold a collective value of over $1.5 billion.
You can also take a look at Jim Cramer Recommends These 10 Stocks For Recession and Michael Burry is Buying These 10 Stocks As Recession Fears Mount.
