The Procter & Gamble Company (PG), Kimberly Clark Corp (KMB), Chevron Corporation (CVX): A Giant Dividend Grower for Your Retirement Portfolio

4. Free cash flow ($1 billion) is increasing after a two-year lull.

So it looks like except for the debt, the company is on the right path for dividend growth.

Cash gusher

The oil and gas giant Chevron Corporation (NYSE:CVX) makes the list. It has a yield of 3.3% right now and has been growing the dividend every year since 1988. The current payout is $4 per share per year.

The California-based company should be able to keep increasing those juicy dividends based upon several factors:

1. It has a low payout ratio. Only 27% of its earnings are returned to shareholders, allowing plenty of room for future growth.

2. It has lots of free cash flow.

3. It has a low long-term debt-to-equity ratio (9%). It can afford to pay shareholders (through dividends and buybacks) instead of the bondholders and banks.

4. The energy industry is expanding. Demand is rising moderately and based upon innovative production techniques that the company uses (such as hydraulic fracturing and directional drilling), supplies are plentiful to satisfy the demand. Chevron Corporation (NYSE:CVX) is also poised to profit from exporting liquid natural gas to countries where prices are higher than in the U.S.

Conclusion

After running the screen and looking at the fundamentals in detail, it appears that Chevron Corporation (NYSE:CVX) is a good choice to add to a retirement portfolio of dividend-growing stocks. All of the factors, such as a low payout rate, low debt, positive growth prospects and cash flow, indicate a buy.

The Procter & Gamble Company (NYSE:PG) also appears to meet most of the criteria. You should keep an eye out for a reversal of the recent earnings slowdown before taking the plunge.

Kimberly Clark Corp (NYSE:KMB) meets all of the criteria I outlined above except for the fact that the debt level is worrisome for now. It can also be kept on the short list for the future.

The article A Giant Dividend Grower for Your Retirement Portfolio originally appeared on Fool.com and is written by Mark Morelli.

Mark Morelli owns shares of Procter & Gamble. The Motley Fool recommends Chevron, Kimberly-Clark, and Procter & Gamble. Mark is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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