11 Dividend Growth Stocks To Watch In 2018

A booming economy, corporate tax cuts and a repatriation holiday put a massive amount of cash in the hands of some of the biggest companies in the world. Many companies are choosing to return at least a large portion of that cash to shareholders in the form of dividends and share buybacks.

With the market firing on all cylinders, investors were also able to land plenty of growth in 2017. For investors who don’t want to choose between yield and growth, here are 11 dividend growth stocks to watch in 2018.

1. Apple Inc. AAPL (1.4 percent yield)

Apple may benefit more from the repatriation holiday than any other U.S. company, and investors can expect the company to raise its dividend payment this year for the sixth consecutive year. On top of its dividend yield, Apple’s share price has risen by 44.2 percent in the past year.

2. Walgreens Boots Alliance Inc WBA (2.0 percent yield)

Not only does Walgreens have a nice dividend, there's double-digit upside to its average analyst price target, according to Nasdaq. Walgreen’s dividend increased by 5.4 percent in the past 12 months, and analysts clearly see the stock as underpriced at its current level.

3. Cisco Systems, Inc. CSCO (2.7 percent yield)

Cisco has raised its dividend for six consecutive years, and averaged a 14 percent dividend increase over each of the past five fiscal years. Cisco’s stock also returned an impressive 37.9 percent in the past year.

4. AbbVie Inc ABBV (2.6 percent yield)

AbbVie is a “dividend aristocrat” that's raised its payout for at least 25 consecutive years. In addition to its 2.6 percent yield, the stock has gained an impressive 74.1 percent in the past year.

5. T. Rowe Price Group Inc TROW (1.9 percent yield)

This aristocrat has a reasonable 17.0 forward PE ratio and has delivered a 59.4 percent return on top of its yield in the past year.

6. Wal-Mart Stores Inc WMT (1.9 percent yield)

Fears over competition from Amazon.com, Inc. AMZN have subsided for now, and Walmart investors are enjoying its 1.9 percent yield and 56.9 percent stock gains in the past year.

7. VF Corp VFC (2.1 percent yield)

Like the other aristocrats on this list, VF Corp has a long history of dividend hikes, but the stock also produced a 53.7 percent gain for investors in the past year.

8. Abbott Laboratories ABT (1.7 percent yield)

Abbott’s yield may be on the low side compared to others on this list, but it’s only because the stock is up 53.1 percent in the past year.

9. McDonald’s Corporation MCD (2.3 percent yield)

Like Walmart, McDonald’s is another U.S. stalwart that has once again found its growth stride. In addition to its aristocrat status, McDonald’s shares are up 45.4 percent in the past year.

10. Johnson & Johnson JNJ (2.3 percent yield)

Johnson & Johnson’s share price is up 27.1 percent in the past year. Given its aristocrat status, investors know that dividend yield is headed higher at some point as well.

11. Target Corporation TGT (3.2 percent yield)

This aristocrat has delivered a 19.3 percent gain on top of its generous yield over the past year and still maintains a forward PE of only 14.8.

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