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Dividend investing is often seen as a slow and boring method for making money. For a select few investors however, dividend investing has translated into financial independence. Retired investors typically purchase dividend paying stocks, and then enjoy the stream of dividend income every quarter, which is deposited in their accounts. This slow and steady method works well, and generates a return on investment in any market environment.

There are many dividend companies however, which not only pay dividends but also grow them out of their rising earnings. Furthermore, this rising earnings tide has led to market-beating total returns.

The perfect dividend growth stock is the one that grows earnings and dividends at a similar high pace, and whose current yield stays in a constant range. Over time, the growth in profitability makes the firm more valuable to investors, who push the stock price higher. As a result, despite the growth in earnings and distributions and share prices, the shares seem to spot the same yield in the range mentioned above for new investors for extended periods of time. For earlier investors however, the rising dividends over time lead to increase in the yield on cost and total passive incomes to pretty impressive amounts.

Casey's General Stores, Inc. (NASDAQ:CASY), together with its subsidiaries, operates convenience stores under the Casey's General Store name in 11 Midwestern states, primarily Iowa, Missouri and Illinois. The company has raised distributions for 13 years in a row and over the past decade boosted them by 20.20%/year. Earnings per share have increased from $0.80 in 2003 to $3.07 by 2012. Analysts expect further EPS growth to $2.98 in 2013 and $3.41 in 2014. Currently, the stock is trading at 19.80 times earnings and yields 1.20%. Check my analysis of Casey's.

Sigma-Aldrich Corporation (NASDAQ:SIAL), a life science and high technology company, develops, manufactures, purchases and distributes various chemicals, biochemicals and equipment worldwide. The company has raised distributions for 37 years in a row and over the past decade boosted them by 16.60%/year. Earnings per share have increased from $1.37 in 2003 to $3.80 by 2012. Analysts expect further EPS growth to $4.16 in 2013 and $4.46 in 2014. Currently, the stock is trading at 20.50 times earnings and yields 1.10%.

W.W. Grainger, Inc. (NYSE:GWW) engages in the distribution of maintenance, repair and operating supplies, as well as other related products and services for businesses and institutions primarily in the United States and Canada. The company has raised distributions for 41 years in a row and over the past decade boosted them by 15.60%/year. Earnings per share have increased from $2.50 in 2003 to $9.71 by 2012. Analysts expect further EPS growth to $11.75 in 2013 and $13.33 in 2014. Currently, the stock is trading at 23.90 times earnings and yields 1.40%.

The Sherwin-Williams Company (NYSE:SHW) engages in the development, manufacture, distribution and sale of paints, coatings and related products to professional, industrial, commercial, and retail customers primarily in North and South America, the Caribbean region, Europe and Asia. This dividend champion has raised distributions for 35 years in a row and over the past decade boosted them by 10.10%/year. Earnings per share have increased from $2.29 in 2003 to $6.15 by 2012. Analysts expect further EPS growth to $7.81 in 2013 and $9.32 in 2014. Currently, the stock is trading at 27 times earnings and yields 1.20%.

Ecolab Inc. (NYSE:ECL) develops and markets programs, products and services for the hospitality, foodservice, healthcare, industrial and energy markets. This dividend achiever has raised distributions for 21 years in a row and over the past decade boosted them by 11.50%/year. Earnings per share have increased from $1.07 in 2003 to $2.41 by 2012. Analysts expect further EPS growth to $3.55 in 2013 and $4.12 in 2014. Currently, the stock is trading at 32.70 times earnings and yields 1.20%.

A. O. Smith Corporation (NYSE:AOS) engages in the manufacture and sale of water heaters and boilers to the residential and commercial markets primarily in the United States, Canada and the People's Republic of China. This dividend achiever has raised distributions for 19 years in a row and over the past decade boosted them by 7.20%/year. Earnings per share have increased from $1.20 in 2003 to $3.44 by 2012. Analysts expect further EPS growth to $3.45 in 2013 and $4.07 in 2014. Currently, the stock is trading at 21 times earnings and yields 1.10%.

The beauty of these firms is that they have been able to dramatically increase earnings per share over the past decade. As a result, each of these companies has managed to boost distributions significantly over the same period. The performance of these companies however shows that dividend yield might not be the most important component of an investor's selection process. Forecasting future profitability however is difficult, and is more art than science.

Unfortunately, the market has constantly overpriced these companies, except during the financial crisis. In addition, the current dividend yields on each of these companies leave much to be desired. The issue is that if the economy falls into recession, investors in these firms will have a lower margin of safety than an investor in McDonald's when stock prices fall, since the dividend portion of total returns is so low. This could be the best time to initiate positions in these firms, however.

That being said, the best investments could be those that yield a lot, while growing earnings, dividends and share prices in the process. If investor's expectations about earnings growth do not pan out as planned, at least they would be receiving a very good return in the form of dividends.

In the interest of full disclosure, I do own a few of these companies. Unfortunately, in the case of W.W. Grainger and Sherwin-Williams, these positions are super small, whereas in the case of Casey's General Stores I have a half lot.

Source: 6 Dividend Growth Stocks I Wish I Owned