S&P 500   5,088.80
DOW   39,131.53
QQQ   436.78
How this AP photographer captured a unique splash at the swimming worlds with an underwater camera
AI Stock Caught Trading Under Secret Name (Ad)
Tax-free status of movie, music and games traded online is on table as WTO nations meet in Abu Dhabi
Delays in promised Western military aid to Ukraine are costing lives, the defense minister says
Free Stock Analysis Report: See The True Value of Any Stock (Ad)
MILAN FASHION PHOTOS: Feben, Rave Review promote looks for women of all shapes, ages and sizes
Caribbean leaders meet with Haiti's prime minister. Foreign force deployment is on the agenda
Free Stock Analysis Report: See The True Value of Any Stock (Ad)
Stock market today: Asian shares mostly decline, while Tokyo again touches a record high
The Eiffel Tower reopens to visitors after a 6-day closure due to an employee strike
S&P 500   5,088.80
DOW   39,131.53
QQQ   436.78
How this AP photographer captured a unique splash at the swimming worlds with an underwater camera
AI Stock Caught Trading Under Secret Name (Ad)
Tax-free status of movie, music and games traded online is on table as WTO nations meet in Abu Dhabi
Delays in promised Western military aid to Ukraine are costing lives, the defense minister says
Free Stock Analysis Report: See The True Value of Any Stock (Ad)
MILAN FASHION PHOTOS: Feben, Rave Review promote looks for women of all shapes, ages and sizes
Caribbean leaders meet with Haiti's prime minister. Foreign force deployment is on the agenda
Free Stock Analysis Report: See The True Value of Any Stock (Ad)
Stock market today: Asian shares mostly decline, while Tokyo again touches a record high
The Eiffel Tower reopens to visitors after a 6-day closure due to an employee strike
S&P 500   5,088.80
DOW   39,131.53
QQQ   436.78
How this AP photographer captured a unique splash at the swimming worlds with an underwater camera
AI Stock Caught Trading Under Secret Name (Ad)
Tax-free status of movie, music and games traded online is on table as WTO nations meet in Abu Dhabi
Delays in promised Western military aid to Ukraine are costing lives, the defense minister says
Free Stock Analysis Report: See The True Value of Any Stock (Ad)
MILAN FASHION PHOTOS: Feben, Rave Review promote looks for women of all shapes, ages and sizes
Caribbean leaders meet with Haiti's prime minister. Foreign force deployment is on the agenda
Free Stock Analysis Report: See The True Value of Any Stock (Ad)
Stock market today: Asian shares mostly decline, while Tokyo again touches a record high
The Eiffel Tower reopens to visitors after a 6-day closure due to an employee strike
S&P 500   5,088.80
DOW   39,131.53
QQQ   436.78
How this AP photographer captured a unique splash at the swimming worlds with an underwater camera
AI Stock Caught Trading Under Secret Name (Ad)
Tax-free status of movie, music and games traded online is on table as WTO nations meet in Abu Dhabi
Delays in promised Western military aid to Ukraine are costing lives, the defense minister says
Free Stock Analysis Report: See The True Value of Any Stock (Ad)
MILAN FASHION PHOTOS: Feben, Rave Review promote looks for women of all shapes, ages and sizes
Caribbean leaders meet with Haiti's prime minister. Foreign force deployment is on the agenda
Free Stock Analysis Report: See The True Value of Any Stock (Ad)
Stock market today: Asian shares mostly decline, while Tokyo again touches a record high
The Eiffel Tower reopens to visitors after a 6-day closure due to an employee strike

3 Dividend Champions with room for dividend growth

Chubb Corporation logo displayed on a smartphone

Key Points

  • As EV prices decrease and automakers ramp production, demand for Albemarle products should trend higher over time.
  • For West Pharmaceutical, a 22% annualized total return over the last 10 years, including a growing dividend, has been a winning combination for income investors.
  • Chubb Limited has a 30-year dividend hike streak and currently pays a $3.44 per share annual cash payout.
  • 5 stocks we like better than Albemarle

The World Series champion Texas Rangers recently paid nice dividends for sports bettors. For stock investors, there's a different, more predictable group of dividend payers worth betting on — the Dividend Champions.

Dividend Champions are publicly traded companies that have increased their dividends for at least 25 consecutive years. Their ability stems from operating strong businesses that grow earnings over long periods. Their stocks make ideal investments for dividend growth investors who prefer a portfolio generating increasing cash flow.

These cash distribution all-stars are often confused with Dividend Aristocrats, which also have 25-year dividend hike streaks — but are specifically members of the S&P 500 index. Some investors prefer to focus on Dividend Champions because they represent a more comprehensive set of dividend growers. There are currently 150 Dividend Champions, nearly three times the number of Dividend Aristocrats.

Both are great places to find winning income stocks — but there's an opportunity to be more selective. Dividend Champions come in different shapes and sizes based on market capitalization, industry and even dividend growth prospects. Some pay a large percentage of profits as dividends, while others pay a small portion. 

The payout ratio, or proportion of annualized dividends to future earnings, is a valuable way to assess dividend sustainability and growth potential. Companies with high payout ratios can be more vulnerable to dividend freezes or cuts when earnings growth slows. Companies with low payout ratios are often better able to withstand a profit downturn and keep the dividend hikes going.


Low-payout Dividend Champions are an incredibly compelling choice for buy-and-hold dividend investors. Approximately one out of every 10 Dividend Champions have payout ratios below 20%. These creams of the crop appear to have long roads ahead when delivering championship-caliber dividend growth.

What is Albemarle’s payout ratio? 

Albemarle Corporation NYSE: ALB has a forward payout ratio of only 10%. Ten percent of next year's earnings will go to shareholders as dividends. The maker of lithium, bromine and other specialty chemicals trades at a three-year low following disappointing third-quarter profits. However, the long-term growth story remains solid, given the company's role in providing battery-grade lithium for electric vehicles (EVs)

As EV prices continue to decrease and automakers ramp production, demand for Albemarle products should trend higher, especially if gasoline prices stay elevated. 

Lithium pricing will be a key determinant of profitability, but with Wall Street forecasting earnings per share (EPS) around $15 next year, paying a 40 cents per share quarterly dividend shouldn't be a problem. As cost inflation subsides and new car loan rates moderate, extending a 29-year dividend hike streak shouldn't be an issue. 

What is West Pharmaceutical's dividend hike streak?

At 31 years, West Pharmaceutical Services Inc. NYSE: WST has one of the most impressive dividend increase streaks among U.S. companies. The Dividend Champion makes delivery systems for injectable drugs and other healthcare products in constant need, which historically led to steady earnings growth and an ability to raise the dividend — albeit modestly.

West Pharmaceuticals investors don’t get a big yield. The current 20-cent per share quarterly dividend equates to a forward yield of just 0.2%. They get equity in a business that has performed well throughout the economic cycle because its owned brands and contract-manufactured products are always in demand worldwide. 

Investors also get a stock with tons of room for dividend growth because West has an ultra-low 9% payout ratio. Management has long opted to reinvest profits in product innovation and geographic expansion but has stayed committed to raising dividends. A 22% annualized total return over the last 10 years, including a growing dividend, has been a winning combination for income investors.

Is Chubb's dividend growth sustainable?

Switzerland-based insurer Chubb Limited NYSE: CB has a 30-year dividend hike streak and currently pays a $3.44 per share annual cash payout. The dividend is more than sustainable, given the company's 16% payout ratio, one of the lowest among large-cap financials. Prospects for future dividend increases are based on Chubb’s leading position in the property casualty insurance market, which has a presence in over 50 countries. 

Chubb recently reported solid third-quarter financials (including 58% core operating income growth) that benefited from higher interest rates on investments and improved margins, bolstering an already stout balance sheet that now contains $2.6 billion in cash. Over the last five years, the board has boosted the dividend by an average of 3%, bringing the yield up to 1.6%. A globally recognized insurance brand and exposure to an "essential" product could eventually bring another title to this Dividend Champion — a 50-year Dividend King.

→ Critical asset just had biggest fall on record (From Stansberry Research) (Ad)

Should you invest $1,000 in Albemarle right now?

Before you consider Albemarle, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Albemarle wasn't on the list.

While Albemarle currently has a "Hold" rating among analysts, top-rated analysts believe these five stocks are better buys.

View The Five Stocks Here

Growth stocks offer a lot of bang for your buck, and we've got the next upcoming superstars to strongly consider for your portfolio.

Get This Free Report

Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Albemarle (ALB)
4.9204 of 5 stars
$120.65+2.1%1.33%9.04Hold$193.00
West Pharmaceutical Services (WST)
4.6911 of 5 stars
$367.44+2.1%0.22%46.63Moderate Buy$435.20
Chubb (CB)
4.6003 of 5 stars
$256.01+0.2%1.34%11.73Moderate Buy$253.00
Compare These Stocks  Add These Stocks to My Watchlist 


Featured Articles and Offers

Search Headlines: