01/15/2015 7:00 am EST
My Top Pick for 2015 is a paint company that is attractive for both its dividend and growth potential, explains income expert Chloe Lutts Jensen, editor of Cabot Dividend Investor.
PPG Industries (PPG) has increased its dividend for 42 consecutive years, earning the stock a Dividend Safety Rating of 10.0 and a Dividend Growth Rating of 8.8 (both out of 10) from IRIS, my Individualized Retirement Income System.
And the company’s low payout ratio of 26% and expected double-digit earnings growth (16% this year and 19% next year) suggest the dividend still has plenty of room to run.
PPG has pursued growth by narrowing its focus to its most profitable operations, including performance coatings for cars, planes, and houses, while broadening is geographic reach.
In November, PPG acquired Mexico’s largest paint company, Comex, shortly after reporting its fifth consecutive quarter of estimate-beating earnings.
For dividend growth investors, PPG Industries is my favorite income-oriented investment for the coming year.
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