The 9 Best Dividend Growth Stocks in the Dow – Kiplinger's Personal Finance

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Dividend yield: 2.1%

Consecutive annual dividend raises: 6

As the largest aerospace company in the world, Boeing’s (BA, $336.21) commercial jetliners and defense, space and security systems reach customers in 150 countries.

Boeing’s long-term outlook for both cash flow and dividend growth is bright for several reasons, starting with the firm’s numerous competitive advantages that protect its industry-leading position.

Specifically, the large commercial aircraft market has been a duopoly, with Airbus (EADSY) sharing the market. Developing, manufacturing and delivering a new commercial airplane are extremely costly and time-consuming activates. Moreover, competing in this industry also requires stringent compliance with numerous regulations, and airline customers prefer to work with a proven operator who can reliably service their planes over their useful lives.

Boeing expects 4.7% average annual passenger traffic growth over the next 20 years to drive 3.3% annual fleet growth. To support this, more than 41,000 new airplane deliveries are expected to be needed, valued at more than $6 trillion.

As a result, Morningstar senior equity analyst Chris Higgins expects Boeing’s operating cash flows to “increase steadily from our forecast of $13 billion in 2017 to a peak of $15.5 billion in 2020.”

Rising cash flow fuels dividend growth, an area where Boeing has certainly delivered in recent years. The company last raised its dividend by 20% in late 2017, capping off its sixth straight year of higher payouts. Boeing’s dividend growth streak isn’t long, but the company has made uninterrupted payouts for more than 20 years – an appealing trait for conservative investors living off dividends in retirement.

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