Dividend growth stocks are attractive investment options because they can allow you to earn more money on your initial investment, without doing anything extra. A dividend that's paying 3% today could in the future be returning more than 5% of your initial investment back to you each year.
One company that has been accumulating a strong track record for rate hikes is TJX Companies (NYSE:TJX). The off-price retailer operates nearly 5,000 stores across nine countries and generally reports modest but consistent profit margins of at least 5% of revenue. It could make for an attractive stock to buy now with consumers being more price-conscious amid inflation. Year to date, its shares have fallen by 20% while the S&P 500 has declined by only 5%.
But a good reason to hang on to the stock for the long haul: its dividend. In march, the company announced it was raising its dividend by 13% to $0.295 for the current quarter. It marks the 25th time in 26 years that TJX has increased its payouts. And the company also plans to reward its investors through share buybacks as well. With free cash flow of more than $2 billion over the trailing 12 months, TJX's business has been doing very well. If these types of results continue, it could be in a great position to continue raising its payouts and returning more money to its shareholders.
At the current rate, TJX's stock is yielding 1.9%, which is better than the S&P 500 average of 1.3%.
