For decades, income-minded investors have searched for the best dividend stocks out there. In my experience, the main criteria to look for when betting on great dividend stocks include a history of strong fundamentals, increasing dividend distributions over time, great entry points (technicals), and a history of bullish trading activity in the shares. 

The hallmark way I go about finding the best dividend stocks – the outliers – is by looking for quiet unusual trading activity. Oftentimes, that can be institutional activity … i.e., big money. I'll go over what that unusual trading activity looks like in a bit. But the five stocks I see as long-term dividend growth candidates are Bristol-Myers Squibb Company (BMY), Lam Research Corporation (LRCX), QUALCOMM Incorporated (QCOM), ResMed Inc. (RMD), and UnitedHealth Group Incorporated (UNH).

Over decades, I've learned that the true tell on great stocks is that big money consistently finds its way into the best companies out there … especially dividend-paying stocks. Some of the biggest returns ever have come from holding stocks for many years and reinvesting dividends. I am a very long-term minded person and see dividend investing as a pillar in personal finance and financial independence.

I take a well-rounded approach and rank each stock by technicals (long-term), fundamentals (long-term), and if there is big money supporting the stock. I want the odds on my side when looking for the highest-quality dividend stocks … and I own many of them. Many times, when a stock is under pressure, it's worthy of inspection. As stock prices head lower, the dividend yield increases. That is important for dividend seekers.

Up first is Bristol-Myers Squibb Company (BMY), which is a leading health care company that is consistently growing and raising its dividend. When deciding on a strong candidate for long-term dividend growth, I like to look for prior leading companies under pressure.

  • One-month performance: -3.65%
  • Historical big money buy signals

Just to show you graphically how I like to look at stocks, below are the big money signals that Bristol-Myers Squibb stock has made over the past year. Green bars are showing that the stock was likely being bought by an institution according to Mapsignals, while red bars indicate selling. Recently, there has been some green. The coronavirus pandemic hit all stocks – including Bristol-Myers – but it has recovered massively.

Chart showing buy and sell signals posted by Bristol-Myers Squibb Company (BMY)
www.mapsignals.com

On top of technicals, when deciding on the best dividend stock, you should look under the hood to see if the fundamental picture supports a long-term investment. As you can see, Bristol-Myers Squibb has a strong dividend history.

  • Three-year dividend growth rate: +3.2%
  • Current dividend per share: $0.45
  • Current yield: 3.12%
  • Three-year earnings growth rate: +94%

Next up is Lam Research Corporation (LRCX), which is a leading semiconductor company. Lam Research has a decent dividend history, and shares are recovering from the pandemic selling pressure. When deciding on a strong candidate for long-term dividend growth, I like to look for prior leading companies recovering after a major market selloff.

  • One-month performance: +10.96% 
  • Recent big money signals

Below are the big money signals that Lam Research stock has made over the past year. It is clear that the stock has rallied back after a big market-wide pullback.

Chart showing buy and sell signals posted by Lam Research Corporation (LRCX)
www.mapsignals.com

On top of technicals, when deciding on the best dividend stock, you should look under the hood to see if the fundamental picture supports a long-term investment. As you can see, Lam Research has a nice dividend history.

  • Three-year dividend growth rate: +54.2%
  • Current dividend per share: $1.15
  • Current yield: 1.47%
  • Three-year earnings growth rate: +40.11%

Next, I'm looking at QUALCOMM Incorporated (QCOM), which is another leading semiconductor company. QUALCOMM is a big player in 5G. When deciding on a strong candidate for long-term dividend growth, I like to look for leading companies bouncing back after a big market selloff.

  • One-month performance: +9.67% 
  • Recent big money signals

Below are the big money signals that QUALCOMM stock has made over the past year. It is clear that the stock has recovered from the selloff.

Chart showing buy and sell signals posted by QUALCOMM Incorporated (QCOM)
www.mapsignals.com

On top of technicals, when deciding on the best dividend stock, you should look under the hood to see if the fundamental picture supports a long-term investment. As you can see, QUALCOMM has a strong dividend history.

  • Three-year dividend growth rate: +5.17%
  • Current dividend per share = $0.65
  • Current yield: 2.92%
  • Three-year earnings growth rate: -177%

Next, I'm looking at ResMed Inc. (RMD), which is a leading health care company that specializes in sleep apnea products. When deciding on a strong candidate for long-term dividend growth, I like to look for prior leading companies that are bouncing after experiencing a pullback.

  • One-month performance: +15.43% 
  • Recent big money signals

Below are the big money signals that ResMed stock has made over the past year.

Chart showing buy and sell signals posted by ResMed Inc. (RMD)
www.mapsignals.com

On top of technicals, when deciding on the best dividend stock, you should look under the hood to see if the fundamental picture supports a long-term investment. As you can see, ResMed has a strong dividend history. 

  • Three-year dividend growth rate: +7.2%
  • Current dividend per share: $0.39
  • Current yield: 0.83%
  • Three-year earnings growth rate: +5.21%

Lastly, I'm looking at UnitedHealth Group Incorporated (UNH), which is a leading health insurance company. When deciding on a strong candidate for long-term dividend growth, I like to look for leading companies pulling back.

  • One-month performance: -5.49% 
  • Historical big money signals

Below are the big money signals that UnitedHealth Group stock has made over the past year. 

Chart showing buy and sell signals posted by UnitedHealth Group Incorporated (UNH)
www.mapsignals.com

On top of technicals, when deciding on the best dividend stock, you should look under the hood to see if the fundamental picture supports a long-term investment. As you can see, UnitedHealth Group has a strong dividend history.

  • Three-year dividend growth rate: +20.3%
  • Current dividend per share: $1.25
  • Current yield: 1.72%
  • Three-year earnings growth rate: +26.38%

The Bottom Line

Bristol-Myers Squibb, Lam Research, QUALCOMM, ResMed, and UnitedHealth shares represent a potential buying opportunity for the long-term dividend investor. Given the strong historical dividend growth and big money signals in the shares, these stocks could be worth a spot in a yield-oriented portfolio. 

Disclosure: The author holds long positions in Bristol-Myers Squibb, Lam Research, QUALCOMM, ResMed, and UnitedHealth at the time of publication.

Disclaimer