7 Dividend Growth Stocks For November 2022

After taking three months off, I'm resuming my monthly series, 7 Dividend Growth Stocks.

In this series, I present seven dividend growth stocks from Dividend Radar for further analysis and possible investment. Dividend Radar is a weekly automatically generated spreadsheet of dividend growth [DG] stocks with dividend increase streaks of five or more years.

Every month, I use different screens to find candidates. Using different screens highlights different aspects of dividend growth investing, such as value, yield, or growth. This month, I decided to use the top-ranked stocks in JUST Capital's 2022 Rankings of America's largest publicly traded companies as my primary screen.

In case you missed previous articles in this series, here are links to a few of them:

• 7 Dividend Growth Stocks For July 2022
• 7 Dividend Growth Stocks For June 2022
• 7 Dividend Growth Stocks For May 2022

About JUST Capital

JUST Capital was co-founded in 2013 by a group of concerned people from the world of business, finance, and civil society – including Paul Tudor Jones II, Deepak Chopra, Rinaldo Brutoco, Arianna Huffington, Paul Scialla, and Alan Fleischmann. By establishing the organization as a not-for-profit 501(c)(3) registered charity, the founders ensured that JUST Capital would be exclusively geared towards achieving its mission. JUST Capital is funded by donations, grants, and earnings from various products and partnerships.

Here is JUST Capital’s mission statement:

“The mission of JUST Capital is to build an economy that works for all Americans by helping companies improve how they serve all their stakeholders – workers, customers, communities, the environment, and shareholders. We believe that business and markets can and must be a greater force for good, and that by shifting the resources of the $19 trillion private sector, we can address systemic issues at scale, including income inequality and lack of opportunity. Guided by the priorities of the public, our research, rankings, indexes, and data-driven tools help measure and improve corporate performance in the stakeholder economy. is "to build an economy that works for all Americans by helping companies improve how they serve all their stakeholders – workers, customers, communities, the environment, and shareholders."

JUST Capital surveys Americans annually to identify the issues that matter most to them in defining just business behavior. It then establishes representative metrics and measures the largest publicly traded U.S. companies to reach an overall ranking for each company.

In the 2021 survey, the public identified 20 issues essential to just businesses, color-coded below by the stakeholder it most impacts:

The percentages reflect the probability that an individual would choose that Issue as most important to defining a just company, based on a representative sample of 3,000 Americans. The percentages are considered weights in that they represent the relative importance of one Issue versus another.

To produce the 2022 Rankings, JUST Capital tracked, analyzed, and ranked 954 companies across five stakeholder groups, 20 issues, 66 metrics, and 241 data points (as determined in the 2021 survey).

Screening and Ranking

For this month’s article, I considered the top 50 companies in JUST Capital's 2022 Rankings that are also members of Dividend Radar (The edition dated November 4, 2022 contains 725 stocks).

Only 27 of the top 50 companies in JUST Capital’s 2022 Rankings are also Dividend Radar stocks. I ranked these using DVK Quality Snapshots and my ranking system.

Here are the top-ranked DG stocks for November:

I own all of these stocks in my DivGro portfolio.

Key Metrics and Fair Value Estimates

Below, I provide a table with key metrics of interest to DG investors:

• Yrs: years of consecutive dividend increases
• Adj Qual: DVK Quality Snapshots adjusted quality score
• Fwd Yield: forward dividend yield for a recent share Price
• 5-Avg Yield: 5-year average dividend yield
• 5-DGR: 5-year compound annual growth rate of the dividend
• 5-YOC: the projected yield on cost after five years of investment
• C#: Chowder Number, a popular metric for screening dividend growth stocks
• 5-TTR: 5-year compound trailing total returns (as of the latest quarter)
• VL Safety Rank: Value Line's Safety Rank
• VL Fin Stren: Value Line's Financial Strength ratings
• MS Econ Moat: Morningstar's Economic Moat
• S&P Cred Rating: S&P Global's Credit Ratings
• SSD Divi Safety: Simply Safe Dividends' Dividend Safety Scores
• Buy Below: my risk-adjusted buy below price (see below)
• –Disc +Prem: discount or premium of the recent share Price to my Buy Below price
• Price: recent share price

The Fwd Yield column is colored green if Fwd Yield ≥ 5-Avg Yield.

I use a survey approach to estimate fair value [FV], collecting fair value estimates and price targets from several online sources such as Morningstar, Finbox, and Portfolio Insight. Additionally, I estimate fair value using each stock's five-year average dividend yield. With up to 11 estimates and targets available, I ignore the outliers (the lowest and highest values) and use the average of the median and mean of the remaining values as my FV estimate.

My risk-adjusted Buy Below prices allow premium valuations for the highest-quality stocks but require discounted valuations for lower-quality stocks:

My Buy Below prices recognize that the highest-quality stocks rarely trade at discounted valuations. As a dividend growth investor with a long-term investment horizon, I'm more interested in owning quality stocks than getting a bargain on lower-quality stocks.

Let's now look at each stock in turn. All data and charts are courtesy of Portfolio-Insight.com.

Johnson & Johnson (JNJ) – Health Care

Founded in 1886 and based in New Brunswick, New Jersey, JNJ has grown into one of the largest companies in the world. The company is a leader in the pharmaceutical, medical device, and consumer products industries. JNJ distributes its products to the general public, retail outlets and distributors, wholesalers, hospitals, and health care professionals.

JNJ is rated Exceptional (quality score: 25) and is only one of two companies (along with MSFT) that have a AAA credit rating from S&P. Portfolio Insight classifies JNJ as a slow-growth stock with a 1-year upside of 5% and a 1-year target price of $180.

The company’s non-GAAP payout ratio of 46% is low for most companies and I expect the company to continue increasing its dividend by about 5% annually.

Microsoft – Information Technology

Founded in 1975 and based in Redmond, Washington, MSFT is a technology company with worldwide operations. The company’s products include operating systems, cross-device productivity applications, server applications, productivity and business solutions applications, software development tools, video games, and online advertising. MSFT also designs, manufactures, and sells several hardware devices.

MSFT is rated Exceptional (quality score: 25) and is only one of two companies (along with JNJ) that have a AAA credit rating from S&P. Portfolio Insight classifies JNJ as a high-growth stock with a 1-year upside of 36% and a 1-year target price of $301.

The company’s non-GAAP payout ratio of 30% is very low for most companies and I think dividend increases of around 10% annually are likely and achievable.

Visa (V) – Information Technology

Headquartered in San Francisco, California, V operates as a payments technology company worldwide. The company facilitates commerce through the transfer of value and information among consumers, merchants, financial institutions, businesses, strategic partners, and government entities. V provides its services under the Visa, Visa Electron, Interlink, V PAY, and PLUS brands.

V is rated Exceptional (quality score: 25) and is one of two stocks in this month’s list with a favorable Chowder Number. Portfolio Insight classifies V as a high-growth stock with a 1-year upside of 58% and a 1-year target price of $310.

V has a very low non-GAAP payout ratio of 21%, so the company has ample room to continue paying and raising its dividend. I think annual increases of at least 10% is likely.

Accenture plc (ACN) – Information Technology

Founded in 1989 and is based in Dublin, Ireland, ACN provides management and technology consulting services to clients in various industries and geographic regions, including North America, Europe, and Growth Markets. ACN’s operating segments are Communications, Media & Technology; Financial Services; Health and Public Service; Products; and Resources.

ACN is rated Exceptional (quality score: 25). Portfolio Insight classifies the stock as a high-growth stock with a 1-year upside of 41% and a 1-year target price of $368.

The company’s non-GAAP payout ratio of 41% is low for most companies, so annual dividend increases around 10% should be possible.

Cisco Systems (CSCO) – Information Technology

CSCO designs, manufactures, and sells Internet protocol-based products and services. The company also delivers integrated solutions to develop and connect networks around the world. CSCO serves businesses of various sizes, public institutions, governments, and communications service providers. The company was founded in 1984 and is headquartered in San Jose, California.

CSCO is rated Exceptional (quality score: 25) and offers the highest yield of this month’s selections. Portfolio Insight classifies CSCO as a slow-growth stock with a 1-year upside of 12% and a 1-year target price of $50.

CSCO’s non-GAAP payout ratio of 45% is low for most companies, but I expect only modest dividend growth in the future, probably less than 5%.

Apple (AAPL) – Information Technology

Headquartered in Cupertino, California, AAPL designs, manufactures, and markets smart phones, personal computers, tablets, wearables, and accessories worldwide. The company also sells a variety of related software, services, peripherals, networking solutions, and third-party digital content and applications. AAPL was founded in 1977.

AAPL is rated Excellent (quality score: 24). Portfolio Insight classifies AAPL as a high-growth stock with a 1-year upside of 17% and a 1-year target price of $161.

The company’s non-GAAP payout ratio of 15% is very low and I expect annual dividend increases of at least 7% in the future.

Mastercard (MA) – Information Technology

MA, a technology company, provides transaction processing and other payment-related products and services in the United States and internationally. The company offers payment solutions and services under the MasterCard, Maestro, and Cirrus brands. MA was founded in 1966 and is headquartered in Purchase, New York.

MA is rated Excellent (quality score: 25) and is one of two stocks in this month’s list with a favorable Chowder Number. Portfolio Insight classifies MA as a high-growth stock with a 1-year upside of 41% and a 1-year target price of $448.

The company has ample room to continue paying and raising its dividend, given its very low non-GAAP payout ratio of only 24%. so the company has ample room to continue paying and raising its dividend. I think annual increases of at least 10% is likely.

Concluding Remarks

This month’s selection of seven stocks are among the top 50 companies in JUST Capital's 2022 Rankings.

Furthermore, these are excellent dividend growth stocks and all but AAPL trade below their respective Buy Below prices.

I own all the stocks in my DivGro portfolio and I think these are excellent candidates for consideration!

Here's a comparative analysis of an equal-weighted portfolio of this month's seven DG stocks:

From a price-performance perspective, the portfolio would have outperformed the S&P 500 over the last five years by a margin of 2.35-to-1. Finbox considers all of the stocks to be undervalued.

As always, I advise readers to do their due diligence before investing.

Thanks for reading, and take care, everybody!

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• Twitter: @div_gro
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I’d be happy to answer any questions you may have!