2 dividend stocks I like which have increased payouts for over 50 years!

As dividend stocks go, these two FTSE picks have exceptional track records, as well as exciting growth prospects.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Two dividend stocks on my radar are Alliance Trust (LSE: ATST) and The Brunner Trust Plc (LSE: BUT).

A big part of this is due to their exceptional track records. However, the future also looks bright.

Let’s take a closer look at them.

Investment trusts for the win

Alliance is one of the largest and oldest trusts in the UK, with roots stretching back to the 1800s. The trust invests in some of the most prestigious businesses across the world.

Similarly, Brunner is also set up as an investment trust, with the same aims. It looks to invest in UK and global businesses to provide its investors with above-average returns.

I’m a fan of investment trusts, as they’re usually run by expert stock pickers. Plus, by investing in a multitude of businesses across the planet, they offer me diversification I may not get by investing in individual stocks.

My investment case

Both Alliance and Brunner have increased their respective dividends for over 50 years! This is remarkable, in my view.

I am aware that the past isn’t an indicator of the future. Plus, dividends are never guaranteed. However, when looking to build wealth, I prefer dividend stocks with a good track record of shareholder value and consistent returns.

Looking specifically at Alliance, I’m excited about its future prospects. The business has a big chunk of its holdings in burgeoning US tech stocks. These include names such as Meta and Microsoft, as well as Nvidia. The artificial intelligence (AI) boom could present excellent growth opportunities. Plus, as the digitization of the world ramps up, these firms, as well as the trust, could continue to grow earnings and returns.

Alliance shares trade on a price-to-earnings ratio of just five, making them look great value for money. Plus, a dividend yield of just over 2% could grow nicely.

Moving over to Brunner, with similar holdings, the business also focuses on other sectors that could provide good growth and returns. Some of these sectors include financial services, as well as industrial and infrastructure.

From a fundamentals view, the shares are a bit dearer, but still attractive, trading on a P/E ratio of 14. A dividend yield of 1.7% could grow, as well as continued increases in payouts, in line with its previous track record.

Risks and final thoughts

For Alliance, high exposure to the tech stocks in the US is risky. This is because economic volatility across the pond could hurt these businesses, and their earnings could be dented by any negativity. We’ve recently seen turbulence in the US hurt many stocks.

Looking at Brunner’s risks, the similarities continue when looking at the bearish aspects. I’m concerned that exposure to cyclical sectors such as financial services could hurt the trust’s earnings and level of returns. For example, financial stocks have been hurt across the globe due to higher interest rates, inflation, and geopolitical issues.

Overall, I’m interested in dividend shares that offer consistent returns, and not just a flashy high yield. For that reason, I’ll be looking to buy shares in both these trusts when I next can.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Sumayya Mansoor has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Investing Articles

Here’s how a Stocks and Shares ISA and Lifetime ISA could supercharge my wealth!

Individual Savings Accounts (ISAs) can help UK share investors take their earnings to the next level. And their importance is…

Read more »

A person holding onto a fan of twenty pound notes
Investing Articles

A high-yield dividend ETF and an investment trust to consider this November!

Investors wanting to boost their passive income could benefit from investigating these high-yield funds and trusts, says Royston Wild.

Read more »

Investing Articles

2 of my favourite, cheap FTSE 100 growth shares this November!

These FTSE 100 growth shares could be great long-term picks to consider, reckons Royston Wild. At current prices he thinks…

Read more »

Investing Articles

Up 26%, can the BT share price really push higher still?

The BT share price has surged on several catalysts in 2024, but there’s evidence to suggest that the stock could…

Read more »

Man writing 'now' having crossed out 'later', 'tomorrow' and 'next week'
Investing Articles

What are the best dividend shares to buy right now?

As shares in B&M European Value Retail have fallen, the dividend yield has reached a 10-year high. Should investors be…

Read more »

Surprised Black girl holding teddy bear toy on Christmas
Investing Articles

My favourite FTSE 100 passive income stock that keeps the Christmas coffers full

The holiday season is expensive and can leave many consumers struggling to make ends meet. Here’s how I use a…

Read more »

Investing Articles

The latest growth forecasts suggest the Glencore share price will hit 555p!

Harvey Jones has been disappointed by the performance of the Glencore share price since he bought the commodity stock last…

Read more »

Dividend Shares

A closer look at the 11% dividend yield forecast for Phoenix Group shares

Phoenix Group shares have one of the highest dividend yields in the FTSE 100 index today. Could this be a…

Read more »