Wal-Mart Stores, Inc. (WMT): Buy Dividend Growers From These Two Sectors

However, based upon a relatively low payout ratio of 57% and projected earnings growth of more than 8% over the next few years this should allow plenty of room for the dividend to increase. Clorox might be a stock to consider.

Energy

Until the internal combustion engine is made obsolete by other forms of technology, motorists will need to fill up their gas tanks. This should keep generating a steady stream of cash flow to oil companies.

Big oil is represented by two companies within the Aristocrats.

One of them, Chevron Corporation (NYSE:CVX), has been increasing its payout each year since 1988 at an annual rate of 7.1%, well above the average inflation rate of 4% to 5% since then. It pays a healthy dividend of $0.90 and yields 3.0%.

Chevron has many diverse oil and natural gas projects in the works, both domestically and overseas, which is a harbinger for more growth.

The company has plenty of room to grow the dividend into the foreseeable future with a low payout ratio of 26% and lots of free cash flow, even after spending the necessary billions in research and development in an effort to find more energy supplies.

Conclusion

For retirement income growth you probably don’t need to look further than the list of companies that have paid and increased dividends every year for at least the last 25. To narrow down that list somewhat you may be able to focus just on a few of the consumer staples and energy stocks.

Wal-Mart Stores, Inc. (WMT): Buy Dividend Growers From These Two Sectors

Published on March 28, 2013 at 2:49 pm by The Motley Fool in News

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