Dividend stocks are a popular choice for risk-averse and long-term income investors. Those with more aggressive risk profiles tend to shy away from dividend stocks because they usually have limited capital growth. There is a bit of truth in that, but like anything, it involves a bit of a deeper dive. 

Yes, dividend stocks tend to be slow-moving, but that’s because the companies are usually large, mature businesses with stable profitability that, more often than not, they use to increase shareholder value rather than aggressively investing for further growth. 

That said, some dividend stocks maintain a consistent and impressive growth pattern, both in their dividend payments and businesses, making them extremely attractive for long-term investments. 

So, today, I'll look at dividend stocks that are quietly performing well, boosting their fundamentals, and setting the stage for even long-term dividend and price growth. 

How I Came Up With The Following Stocks

Using Barchart’s Stock Screener, I selected the following filters to get my list: 

• Annual Dividend Yield: Left blank so I can arrange the results based on it.
• Current Analyst Rating: 4 (Moderate Buy) to 5 (Strong Buy).
• Cash Flow Growth Last Year: 10% or more. This filter measures the cash flow growth of a company based on its latest annual report. More cash flow means greater flexibility and better headroom to increase dividend payments.
• 5-Year Revenue Growth: 30% or more. This filter ensures that the company is increasing its top line and expanding steadily over the long term. A five-year revenue growth rate of 30% indicates that the business is effectively scaling its operations, increasing sales, and capturing more market share despite its current size.
• Net Income Growth Last Year: 30% or more. Startups and tech companies might post triple-digit income growth, but that isn't the norm. Income growth of 30% or more, especially in more mature companies, is what we want to see.
• Watchlists: Dividend Aristocrats and Kings. These companies have increased dividend payments for 25 and 50 years, respectively, through market upheavals and economic disasters. That is an excellent sign of stability, consistency, and focus on shareholder value. 

With these filters set, I ran the screen and got seven results: 

As said earlier, the results were arranged from highest to lowest yields. Now, let’s talk about each company, starting with: 

California Water Service Group Holding (CWT)

California Water Service Group Holding is one of the US's biggest regulated water utility companies, providing water and wastewater services to residential, commercial, and industrial customers. The company operates primarily in California, with additional subsidiaries in Washington, New Mexico, Hawaii, and Texas. 

Cal Water’s FY’24 financials had some good news for investors, reporting impressive growth among key metrics. Revenue was up $1.037 billion from $794.6 million last year, while net income increased from $51.9 million to $190.8 million - an impressive 267.57% growth rate. Cash flow also increased by 33.54%. 

This Dividend King pays $1.20 annually, which translates to an aprox. 2.5% yield based on its current stock price. CWT stock also has the only strong buy rating on this list. 

Air Products and Chemicals (APD)

Air Products and Chemicals, Inc. is a global provider of industrial gases, including hydrogen, nitrogen, oxygen, and specialty gases, serving industries such as energy, healthcare, and manufacturing. The company is at the forefront of the hydrogen economy, investing heavily in clean energy solutions, including hydrogen fuel and carbon capture technologies. It used to have a liquefied natural gas segment, but it has since sold all its LNG assets to Honeywell in an all-cash transaction.  

Air Products’ FY’24 financials reported an impressive 67% increase in EPS and a 13.76% cash flow growth. As a Dividend Aristocrat, the company has increased dividends for 43 straight years, with its latest increase bringing its annual rate to $7.16, translating to an aprox. 2.4% yield. APD stock has a moderate buy rating from analysts and a high target price of $417, suggesting a potential 40% upside in the stock.

Middlesex Water Company (MSEX)

Last on the list is Middlesex Water Company, another regulated water utility and wastewater company that services residential, commercial, and industrial customers in New Jersey, Delaware, and Pennsylvania. The company operates through its subsidiaries, including Tidewater Utilities, Utility Service Affiliates, and Pinelands Water & Wastewater. 

The company’s FY’24 financials reported strong growth, with operating revenues increasing from $166.27 million to $191.88 million. Net income also rose from $31.40 million to $44.24 million -  that's up a little over 40%  - while cash flow improved by 11.27%  this year. 

Middlesex Water is a Dividend King with 52 years of consecutive increases. Its latest annual rate is $1.36, translating to an aprox. 2.1% yield. MSEX stock has a moderate buy rating and a high target price of $66. 

Final Thoughts

Companies with strong fundamentals and the capacity to consistently grow their top and bottom lines can be great additions to your portfolio. However, you also need to make sure the addition makes sense within the context of your investment strategy, risk tolerance, and portfolio diversification. We all want to be financially independent, but there’s no one way to get to that goal. So, always do your due diligence and fundamental analysis and consider your preferences and risk factors before deciding.