Nasdaq (NDAQ) just increased its dividend by 10%. Gotta love a double-digit dividend raise. Being a dividend growth investor is as easy as waking up and finding out that shares you bought a while ago are now going to pay you even bigger dividends than they were before. Tough life. But someone’s gotta do it.
This marks the 12th consecutive year of dividend increases for the financial services corporation.
And what a start Nasdaq is off to — it’s been blazing. The 10-year DGR is 19.6%. Just astounding. Now, you do give up some yield on this one – it’s only 1.6%. But with double-digit growth, the yield isn’t as much of a consideration.
If you can let that compounding do its magic over time, those dividend raises will add up and create a large dividend down the road. With a payout ratio of only 38.9%, I suspect there’s plenty of dividend compounding yet ahead.
This one’s 20% off of its recent high, and it looks very buyable right now.
Its P/E ratio of 24 might look rich… if you’re comparing it to slower-growing businesses that don’t have this level of quality. But if you’re comparing apples to apples – as in this stock’s own five-year average P/E ratio of 26.3 – it’s not rich at all.
Look, you tend to get what you pay for in life. And this is a terrific business with high margins. It owns the namesake Nasdaq stock exchange, which is a money machine. Exchanges run miniature monopolies. If you want to own a slice of the Nasdaq, buying this stock gets you just that.
— Jason Fieber
P.S. If you’d like access to my entire six-figure dividend growth stock portfolio, as well as stock trades I make with my own money, I’ve made all of that available exclusively through Patreon.