Dividend Growth Stocks: Avoid the Dividend Aristocrat Trap

Dividend investing has a proven track record of outperforming non-dividend-paying stocks, leading many investors to rely on Dividend Aristocrats. However, focusing solely on the duration of dividend increases is insufficient.

To ensure sustained dividend growth, investors should consider companies that can generate sufficient free cash flow (FCF) to support their payouts. This article highlights seven dividend growth stocks with strong FCF that can maintain their dividend payments.

LVMH, UnitedHealth Group, Dick’s Sporting Goods, Domino’s, AbbVie, Automatic Data Processing, and Home Depot are all recommended as potential investments. These companies have demonstrated consistent dividend growth, high FCF generation, and resilience to economic challenges.

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