4 strong dividend growth stocks to make you RICHER this year

The S&P ASX All Ordinaries Index (ASX: ^AORD) has been meandering just under the 5,500 mark since February. The US markets have hit new all-time highs, but ours is still more than 15% down from its pre-GFC high set in late 2007. Investors are looking for signs that the bull market can keep on running. The next reporting season will shed some light on that.

Rather than waiting, be proactive and get stocks that are already tipped for good growth this year and into the next. Brokerage firm Morgans has identified four stocks that already pay good dividends and have earnings forecasts pointing upwards. Their individual financial strength also set them apart as safer, more stable companies worthy of being in a portfolio. Let’s jump right in and see how they could make you RICHER over this next year.

1) Primary Health Care Limited (ASX: PRY) $4.59

Being a company that operates a network of medical centres and pathology centres, it has defensive stock qualities to help protect your portfolio from a weak market should the ASX sell off. A constant flow of business between hospitals and patients keeps earnings and dividends growing. It offers a solid 4.0% dividend yield and dividend payments are forecast to rise more than an average 10% annually over the next two years.

2) AGL Energy Ltd (ASX: AGK) $15.79

An electricity generator and retailer with upstream gas production, the stock has bumped along just under $16 for the last two years. It is involved in several LNG projects in Queensland and NSW to build up gas resource supplies. Its utilities services give it steady income streams, although a growing number of people who are using solar electricity could affect revenue growth. AGL has moved a step closer to acquiring the state owned Macquarie Generation company in NSW that supplies about 13% of electricity to the eastern states and about 40% of NSW electricity needs. It also has a 4.0% yield and earnings are forecast to gain over 10% in the next year. Of these four, this may be the weakest in the short term, but long-term prospects should be good.

3) Orora Ltd (ASX: ORA) $1.42

This packaging company recently de-merged from packaging giant Amcor Limited (ASX: AMC) and has steadily risen in price since listing in December 2013. It operates an extensive fibre and beverage packaging business in Australia and has taken over a large existing distribution network in the US, thanks to its former parent company. Already well-established, earnings are forecast to rise significantly in the next two years. It paid a three cents per share interim dividend unfranked in April. The next reporting season should show what the final dividend will be. Spin-off companies usually perform well after de-merging because they are set up with strong existing businesses and balance sheets.  Look out for the growth in this one.

4) Perpetual Limited (ASX: PPT) $48.76

The investment fund manager has performed wonderfully over the past two years, but it looks like there is more to come. Stronger financial markets have returned good investment gains. Its conservative stock picking of quality companies gives shareholders stable earnings growth as well as a steady 3.2% yield fully franked. More investment funds are flowing into Perpetual, giving it more ammunition to make further gains. Both earnings and dividends are forecast by analysts to dramatically increase in the next two years. This is one case where you can leave the stock picking to the professionals and just buy its stock for your own gains. If you can’t beat them, buy them!

A better buy than these 3

Of these four stocks, I would prefer Perpetual over the next year because of the higher revenue and earnings growth potential in a strong market. However, there's 1 company which I think could be an even better buy for investors looking for both growth and dividends.

The Motley Fool has issued a firm "BUY" rating on this small but ultra promising ASX company... and you can get the name and code FREE right now. Click here for your free copy of "The Motley Fool's Top Stock for 2014."

Motley Fool contributor Darryl Daté-Shappard does not own shares in any company mentioned. 

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