2 Dividend Stocks Outperforming Expectations With Solid Growth

Earnings season has many investors turning away from solid dividend growth stocks that have routinely performed well over the past 25 years. Two stocks in particular that you want to keep an eye on despite short-term fluctuations are:

Oct 17 2011: Anaheim,CA Disneyland park in Anaheim. A statue of Walt Disney and Mickey Mouse.
Oct 17 2011: Anaheim,CA Disneyland park in Anaheim. A statue of Walt Disney and Mickey Mouse.

1.     Walt Disney (DIS)

Walt Disney is down nearly 20% from its 52-week high, but the company has an impeccable track record. A large diversified business, Disney owns television and cable networks, a movie studio, apparel and merchandise lines, cruise ships and theme parks, to name a few.

The company’s diversification has allowed it to perform well.

ESPN, a cable network property owned by the company, has caused investor sentiment to fall in recent months as subscriber numbers continue to fall. The leader in live sports, investors are overstating the concern of ESPN, which still maintains a strong viewer base.

Revenue for Disney jumped 14% in Q4 2015 and adjusted EPS was up 28%.

Despite low dividend yields of 1.4%, the company is a good fit for dividend growth portfolios and will continue to grow its 11 businesses generating over $1 billion a year each to maintain profitability.

Wells Fargo Bank Exterior
VALENCIA, CA/USA – AUGUST 17, 2014. Wells Fargo bank exterior. Wells Fargo & Company is an American multinational banking and financial services holding company headquartered in San Francisco, California.

2.     Wells Fargo (WFC)

Wells Fargo is a cheap buy, and the company is the third largest bank in the country by assets. Investor concerns that big banks will lose on oil and gas loans doesn’t affect Wells Fargo as severely due to the company’s low energy-related losses.

Strong growth in loans (7%) and deposits (4%) mitigated the company’s energy-related losses last quarter.

Strong revenue growth of 4% is a positive sign for investors with $5.5 billion in profit last quarter despite EPS dropping 4.8% year-over-year. Wells Fargo offers a 3% dividend, and we expect this stock to lift off of its low stock prices.

The Federal Reserve raising rates again will further boost the bank’s earnings growth.

Ben Myers

Ben began his long career in international finance and investing after graduating with a degree in Finance & Accounting. Prior to founding a financial advisory firm he worked with multi-national institutions including HSBC and Bank of Ireland. After several stints as a chief analyst at forex/binary options companies Ben still remains a keen trader and featured contributor on numerous financial sites.