Diversification not only works well for your portfolio, but it works well for businesses too. With a variety of business lines, a firm can still perform well when one market segment is lower. This has been the mantra for the broader utility sector and our latest Best Dividend Growth Stocks Model Portfolio pick is a good example of this.
Our pick is a utility player with a variety of related businesses under its umbrella. This includes the distribution of natural gas to customers, the transmission of gas through interstate and regional pipelines, electricity transmission lines, electricity generation assets, compressed natural gas (CNG) solutions, propane, and other related assets.
This huge scoop has provided plenty of dividend growth for shareholders as energy demand has continued to grow. Better still is that our pick’s multiple streams of revenues and cash flows—from take or pay contracts based on volume to pricing-based sales—have provided plenty of opportunities for safety and dividend increases.
With growth and stability, our pick makes a wonderful addition to a dividend growth portfolio. Watch for when the stock goes ex-dividend on Tuesday, June 14.
To make room for our utility pick, we’ve decreased our positions in a healthcare stock and defense contractor.
You can check out the Best Dividend Growth Stocks Model Portfolio to explore all the stocks.
