We live in interesting times and dividend growth investors will continue to face challenges. As the impact of the COVID-19 pandemic on the global economy plays out, companies will need to adjust to a new "normal." I think that may include slower dividend growth and lower yields, unfortunately.
My approach will continue to favor investing in the highest-quality dividend growth stocks. I identify such stocks using DVK Quality Snapshots. I rank stocks by quality score and consider fair value estimates when looking at candidates for investment.
In April, I presented the three top-ranked dividend growth stocks in each of the GICS sectors. Following a reader's suggestion, I started a new series of articles ranking dividend growth stocks in each GICS sector. Previous articles presented the top-ranked Industrials, Consumer Staples, and Health Care sector stocks.
This article presents the ten top-ranked dividend growth stocks in the Utilities sector.
As a dividend growth investor, I focus on investing in stocks that pay ever-increasing dividends. I use Dividend Radar as my primary watch list of dividend growth stocks. The list and accompanying spreadsheet with fundamental and added value data are updated every Friday and contains stocks with dividend increase streaks of at least five years. You can download the latest copy (dated July 31, 2020) here. The latest list contains 765 stocks, of which 57 are Utilities sector stocks.
The Utilities Sector
The Utilities sector is a defensive sector that offers less volatility than other equities. Utilities are resistant to economic cycles because the demand for utilities does not change much in down cycles.
One reason why Utilities are price-stable is that the government allows them to be monopolies in their respective jurisdictions. This creates a non-competitive and regulated, but stable environment for Utilities to operate in.
Given their stable income base, utility companies
