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Great for income investors: this stock has doubled its dividend in the last 6 years! ()

Are you one of those investors who like to invest their money in solid dividend stocks? Then you are probably in good company. Because more and more investors now appreciate the advantages of regular dividend payments.

Even now, as we deal with rampant inflation and stock market tensions, the earnings payouts can certainly offer some comfort. Furthermore, it can also be a sensible matter in general to create additional passive income with the dividend.

Of course, this is where stocks of companies that should increase their profit sharing a little every year should come into play. Also the American conglomerate ITW (WKN: 861219), for example, is one of these companies.

ITW was founded in 1912 and is based in Glenview (Illinois). With more than 45,000 employees, the company is active in 52 countries worldwide. Since the conglomerate has a very diverse portfolio, it is of course understandable that its products are also used in a wide variety of industries.

Ovens, dishwashers and refrigerators, for example, are produced for hotels and restaurants. But the range extends to the production of automotive components, which can then be found in vehicles all over the world.

ITW offers solid dividend growth

If you look at the Illinois group for the first dividend payment, then you have to look far back. Since 1933, the shareholders have regularly shared in ITW’s profits. And we’ve seen the dividend increase every year since 1964.

Of course, 2022 is no exception. As a result, investors enjoyed a quarterly payout per share of $1.31, up 7.4% from June, on the back of the company’s 59th straight dividend increase in October. Extrapolated for one year, this results in a total dividend of $5.24 per share.

Six years ago, however, shareholders were receiving a quarterly dividend of just $0.65 per share. So it has more than doubled to date. And if you look over the last 10 years, you can see a total dividend growth of 245% over that period.

Which is certainly to be considered extremely gratifying. After all, this equates to an average annual dividend increase of 13.17% over the last ten-year period.

Another look at the stock

ITW shares have not been entirely spared from this year’s stock market correction either. At its peak, its price was up to 28% lower than at the beginning of the year. However, the share has recovered and is currently trading at USD 226.78 (November 21, 2022), a good 7% lower than at the beginning of January.

In my opinion, the current valuation of the ITW share with a P/E (price-earnings ratio) of 20 can still be classified as quite moderate. Incidentally, a value of 2.31% can currently be calculated for the dividend yield. But there is one more piece of important information. Namely that the conglomerate expects a record profit for the current financial year.

So I could imagine that there should hardly be anything standing in the way of the 60th dividend increase next year. If you are still looking for an international stock with solid dividend growth for your portfolio, you might just find it in the papers of the American company ITW.

The article Great for Income Investors: This Stock Has Doubled its Dividend in the Last 6 Years! first appeared on The Motley Fool Germany.

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Andre Kulpa does not own any of the stocks mentioned. The Motley Fool does not own any of the stocks mentioned.

Motley Fool Deutschland 2022

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