While some Dividend Aristocrats -- stocks that have raised their payouts annually for at least 25 years in a row -- offer attractive yields and have solid track records, their growth rate may just be in the low single digits, which can be a problem for long-term investors. That's why it's important to consider the both growth rate and dividend payout ratio. But long-term investors who are saving for retirement, a child's college fund, or even to pass assets down to their descendants will want to consider dividend growth above all else. Below are two rock-solid companies with fast-growing payouts that are likely to be dividend powerhouses decades from now.
In the span of one generation, Starbucks (NASDAQ:SBUX) has gone from a small coffee chain to the second-biggest restaurant company in the world, behind McDonald's. Plenty of jokes have been made over the years about the company's ubiquity, but it continues to expand aggressively, adding more than 2,000 stores last year to top 25,000 worldwide. Like Starbucks, Nike(NYSE:NKE) dominates its industry, and has crushed the market over the long term. With its brand and distribution advantages, and its leadership in athletic footwear, Nike is likely to continue to outperform the market.
I'm considering SBUX for baby DivHut's portfolio for the same reason you write about... continued growth for a while longer.