Dividend investing is one of the popular forms of making profits from stock markets. Dividend investors are generally defensive investors who expect strong growth in dividends combined with steady share price appreciation.
Dividend investors always like to invest in companies that have a long dividend growth history along with sustainable growth potential and strong future fundamentals. Below are the three best dividend paying companies that are likely to generate big cash returns in 2019.
- Broadcom
Broadcom (NASDAQ:AVGO) has raised its dividends in the last 8 straight years. In addition, the company raised dividend at an astonishing rate. It has increased the quarterly dividend by 51% for fiscal 2019; the three-year average growth was standing around 69%. The developer of semiconductor and infrastructure software solutions repurchased almost $7.2 billion of outstanding shares in fiscal 2018.
The company plans to return half of its free cash flows to investors while using the rest of free cash flows for acquisitions and share buybacks.
- Genuine Parts Company
Genuine Parts Company (NYSE: GPC) has a long history of returning significant cash to investors in the form of dividends and share buybacks. It has paid a quarterly dividend every year since 1948, and the company has raised its quarterly dividend over the past 63 consecutive years. This year it has raised the quarterly dividend by 6% to $0.76 per share, yielding close to 3%.
GPC has generated sales growth of 15% in fiscal 2018 compared to 2017. Its earnings per share, however, grew at a much faster pace than revenue growth. Its earnings per share of $5.68 in fiscal 2018 increased substantially from earnings of $4.40 per share in 2017. With the significant revenue and earnings growth, its cash flows are also accelerating at a double-digit rate – allowing GPC to return massive cash to investors in the form of dividends and share buybacks.
- Cummins
Cummins (NYSE: CMI) remains one of the safest stocks for dividend investors over the years. It has raised annual dividend every year over the past 13 years. The company also appears in a strong position to make a decent dividend hike in fiscal 2019 considering its financial outlook and strong cash generation potential. Its dividend yield of close to 3% makes it an attractive stock for dividend investors.
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