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12 Dividend Champions That Will Benefit from Rising Interest Rates

On December 14, the Federal Reserve announced that they were hiking the fed funds rate by 0.25%. This is the rate that financial institutions lend money to each other overnight, and it has a trickle-down effect on other interest rates in the domestic economy.

This increase is indicative of a larger trend – it comes after an equal-sized interest rate increase in December 2015. Further, the Federal Reserve indicated in the announcement to expect three additional hikes over the next twelve months.

If each of the three hikes in 2017 will be of the same magnitude, then the year will finish at a 1.5% fed funds rate. This presents a dramatic change to our interest rate environment given that short-term rates have been held near zero since December of 2008 to provide economic stimulus.

Investors should make themselves aware of the effects that these rate increases may have on their portfolio, as interest rates have a large effect on the price of real assets.

There are currently a few Dividend Aristocrats that will benefit from rising interest rates. Most of them come from the financial sector.

Here are the results from my research...

20 Cheap High Growth Dividend Stocks

As an income investor, are you skeptical about finding high-quality dividend stocks at a decent price now that the S&P 500 is heading to record highs? Fret not, for you've come to the right place.

Today I like to introduce a few stock ideas that might be interesting for long-term investors with dividend focus and solid growth expectations.

These are my criteria:

Forward P/E under 15

Debt-to-Equity under 1

Payout Ratio Below 100%

Earnings growth expected over 10% yearly for the next five years.

Here are the cheapest results by forward P/E compiled in a list...

24 Dividend Growth Stocks With Solid Yields To Consider

Dividend growth is a wonderful thing, but you should also require the stocks you buy to look cheap. Here I seek out stocks trading at multiples of price to sales, earnings, and cash flow lower than five-year averages.

Stocks that trade at discounted valuations can be cheap for a reason, so I also require expected sales growth for the year ahead to be positive. Using these criteria, the 24 stocks shown in the table have proven themselves to be “dividend growth superstars” that kept on paying and even raising their dividends through the 2008-2009 financial crisis. They also trade at historically cheap valuations on at least two of the three ratios I use to determine value: price/sales, price/earnings, and price/cash flow.

If you follow a strategy of investing in temporarily cheap stocks of companies that habitually hike their dividends, not only will you experience significant capital gains when the stock falls back into favor with the market, but the yield you earn on your original investment can balloon to downright plump proportions.

These are the results...

Stock Compilation Of The Latest Dividend Raiser 2017

Every week there are dozens of companies that increase their dividend payout. Over the past week, there were several companies that raised their dividends to shareholders. I summarized them in a list in order to get a quick overview of the latest dividend raiser.

Most of those companies have lower yields, but pretty good rates of historical dividend growth. The companies are listed below:

These 5 Stocks Give Over 15% Return To Shareholders

Now let's apply those lessons to 2017, and highlight five that should do even better (17%+ returns) this year (and likely beyond).

Remember, projecting our returns from any given stock is simple. We simply add together the three ways it can pay us:

Its current dividend. A future dividend hike. Share repurchases. It also helps if the stock is inexpensive, as buybacks deliver more bang for management's buck. So let's stick with stocks that are dirt-cheap, trading for 10-times free cash flow (FCF) or less for this exercise.

Here's an example of a stock ready to return 17% or more over the next year.