This Top Dividend Stock Just Raised Its Payouts by 8%

Income investors should always target dividend stocks that increase their payouts. Not only can it be a sign of financial strength for the business, but it also shows the company’s willingness to reward its shareholders. The longer that a company has a dividend streak going for, the more likely it is that it will want to continue that streak and keep it going.

One company that recently raised its dividend was medical device maker Medtronic (NYSE:MDT). The healthcare business reported its year-end earnings numbers on May 26 and at the same time, announced an 8% increase to its dividend. Investors will now be receiving $0.68 every quarter per share that they own. On an annual basis, the dividend now yields just under 2.8%, which is double the S&P 500 payout of close to 1.4%. This marks the 45th consecutive year that Medtronic has raised its dividend payments. That’s an impressive streak that puts it just five more annual rate hikes away from becoming a Dividend King and hitting 50 years of consecutive increases.

Given the company’s strong financial performance, there’s little doubt that it will continue raising its dividend. This year, the business expects that its organic revenue will increase between 4% and 5%. It also projects adjusted EPS to be at least $5.53, which is more than sufficient to cover its dividend payments (over four quarters they would total $2.72).

Medtronic’s shares are down 8% year to date and the stock trades at a price-to-earnings multiple of 26. For income investors looking for a safe place to park their money, Medtronic is an excellent option.