In this video, Chuck Carnevale, co-founder of FAST Graphs and widely known as “Mr. Valuation,” examines 15 dividend-paying companies selected for their potential to generate rapidly growing income. These are not simply the fastest dividend growers in the market. Each company was also chosen for its financial strength, operating history, and current valuation.
Using FAST Graphs, Chuck reviews companies including Accenture, Ameriprise Financial, A. O. Smith, Becton Dickinson, Citigroup, Cigna, Comcast, Amdocs, EOG Resources, Intuit, JPMorgan Chase, Kroger, Raymond James Financial, and J. M. Smucker. He compares their dividend records, earnings growth, credit quality, debt levels, cash flow, and valuation to identify possible opportunities for long-term investors.
A key lesson is that dividend-growth statistics must be examined carefully. A company that recently initiated or dramatically increased its dividend may show an extraordinary growth rate that is unlikely to continue. Special dividends can also distort the numbers. Investors should therefore study multiple time periods and determine whether operating and free cash flow adequately cover the dividend.
Chuck also explains the three primary sources of investment return: business growth, dividend income, and valuation expansion. Even an excellent company can produce disappointing returns when purchased at an excessive price. Conversely, a financially sound company trading below its intrinsic value may offer attractive income and capital-appreciation potential if its valuation eventually returns to normal.
For investors with 10, 15, or 20 years before retirement, companies that consistently raise their dividends may provide a powerful combination of increasing income and long-term wealth creation. The central message is straightforward: valuation matters, and it matters a lot. Before investing, understand what the business is worth, examine the sustainability of its dividend, and avoid paying more than its fundamentals justify.
Disclaimer: The opinions in this document are for informational and educational purposes only and should not be construed as a recommendation to buy or sell the stocks mentioned or to solicit transactions or clients. Past performance of the companies discussed may not continue and the companies may not achieve the earnings growth as predicted. The information in this document is believed to be accurate, but under no circumstances should a person act upon the information contained within. We do not recommend that anyone act upon any investment information without first consulting an investment advisor as to the suitability of such investments for his specific situation.
