Top 4 Dividend Growth Stocks for 2020

The year 2019 has been a fantastic year for the stock market and has rewarded investors with one of the best years on record for the S&P 500. If you are already investing in the market or are thinking about getting started in 2020, now is not the time to get complacent. There are still plenty of great opportunities to be found in the stock market, all it takes is a little bit of research work and discipline.

Dividend growth stocks are a nice choice for investors that are interested in receiving a steady stream of income for their portfolio that will continue to grow as time goes on. They are companies that have a reliable record of increasing their dividend payouts per share every year. That means there’s a high probability that the trend of increasing dividend payouts will likely continue in 2020 and beyond. A lot of investors like to build long-term dividend growth portfolios because they can help you earn a nice return regardless of how the stock’s price is doing.

If you purchase dividend growth stocks and use their payouts to reinvest in other dividend growth stocks, the power of compounding really works in your favor. It’s a formidable investing style that can potentially help you build real wealth over time. We are going to look at the top 4 dividend growth stocks for 2020 below to help you gain some insight into potential winners for next year.

1. Microsoft NASDAQ: MSFT

You are probably already familiar with Microsoft, as it’s a massive company with one of the largest market capitalizations. You might even be reading this article on one of their ubiquitous computers or portable devices. Microsoft is a company with great leadership, a diverse business portfolio, and a very nice quarterly dividend payout that has been steadily increasing. Their cloud business, in particular, is an intriguing prospect for 2020, particularly since they recently won a huge $10-billion-dollar contract with the Department of Defense. The bottom line is that Microsoft is a great company with huge potential in 2020 and beyond.

2. Merck & Company Inc. NYSE: MRK

Another great dividend growth stock to look into for 2020 is Merck & Company Inc. This is a large multinational pharmaceutical company with a nice dividend yield. It is the perfect example of a company that not only rewards shareholders with consistent payouts and earnings growth but also works hard to make the world a better place. Their pharmaceutical products treat a number of serious medical conditions like cancer, cardiovascular disease, and asthma. They also have a large portion of their business in vaccines. Merck has a lot of positive momentum going into 2020 along with some truly fascinating business initiatives, which absolutely should put it on your radar.

3. Johnson & Johnson NYSE: JNJ

It’s likely that you are using some of the products that this dividend growth company manufactures on a daily basis. Johnson & Johnson is a blue-chip drug manufacturer that has actually been through a tough couple of years. Most recently, they made headlines for accusations that their baby powder was contaminated with asbestos. That might not be the type of news that entices you to buy, but it’s looking more and more like JNJ is poised for a strong rebound next year. You simply can’t ignore the incredibly solid balance sheet and consistent dividend growth that this pharma giant has to offer. The stock has been beaten up, but the technicals are now pointing towards a bullish trend in 2020. This is a company that any dividend growth investor would love to have in their portfolio.

4. The Walt Disney Company NYSE: DIS

The last dividend growth stock for 2020 that we will look at is The Walt Disney Company. The mouse has been strong in 2019 and will be looking to continue their positive momentum into 2020. They have a diverse business model, a strong balance sheet, and recently launched a new streaming video service called Disney+ which is capturing a lot of valuable market share from other companies in the streaming space such as Netflix. With some of the most popular movie franchises in the world like Frozen and Star Wars, Disney will likely continue to dominate the box office for years to come. It will be interesting to see their next earnings report and just how great the Disney+ numbers are, so make sure you keep an eye on Disney next year.

2020 is shaping up to be a truly monumental year for the stock market, and the companies mentioned above could potentially be set up for a lot of success. However, please remember to always do your due diligence before making an investment and keep in mind that past performance is not always an indicator of future success.