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 AbbVie Inc. (ABBV), Analog Devices, Inc. (ADI), Costco Wholesale Corporation (COST), Domino's Pizza, Inc. (DPZ), and Broadcom Inc. (AVGO).

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 marry what I've learned on Wall Street and decades of investment experience in my blog, PersonalFinanceKid.

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 shares. 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 AbbVie Inc. (ABBV), which is a big drug maker 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 showing poor technical performance:

  • One-month performance: -18.06% 
  • Historical big money buy signals

Just to show you graphically how I like to look at stocks, below are the big money signals that AbbVie stock has made over the past year. Green bars are showing that AbbVie was likely being bought by an institution according to Mapsignals, while red bars indicate selling. It is clear there was a lot of green a few months back. The coronavirus has hit all stocks … including AbbVie. Pullbacks can offer great entries in strong dividend-growth names.

Chart showing the unusual institutional (UI) signals made by AbbVie Inc. (ABBV)
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, AbbVie has a strong dividend history:

  • Three-year dividend growth rate: +23.4%
  • Current dividend per share: $1.18
  • Current yield: 6. 5%
  • Three-year earnings growth rate: +15.28%

Next up is Analog Devices, Inc. (ADI), which is a leading semiconductor company with a rich dividend history that is seeing recent selling pressure. When deciding on a strong candidate for long-term dividend growth, I like to look for prior leading companies experiencing unusual selling in the shares:

  • One-month performance: -20.31%
  • Recent big money sell signals

Below are the big money signals that Analog Devices has made over the past year. It is clear the stock is pulling back, marking a nice entry point.

Chart showing the unusual institutional (UI) signals made by Analog Devices, Inc. (ADI)
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, Analog Devices has a strong dividend history, and the recent market pullback could be creating a great opportunity:

  • Three-year dividend growth rate: +8.2%
  • Current dividend per share: $0.62
  • Current yield: 2.8%
  • Three-year earnings growth rate: +19.63%

Next, I'm looking at Costco Wholesale Corporation (COST), which is a leading bulk home goods store. When deciding on a strong candidate for long-term dividend growth, I like to look for leading companies seeing sell pressure:

  • One-month performance: -8.03% 
  • Recent big money sell signals

Below are the big money signals that Costco has made over the past year. It is clear that the stock is under pressure:

Chart showing the unusual institutional (UI) signals made by Costco Wholesale Corporation (COST)
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, Costco has a strong dividend history:

  • Three-year dividend growth rate: +12.8%
  • Current dividend per share: $0.65
  • Current yield: 0.91%
  • Three-year earnings growth rate: +15.79%

Next, I'm looking at Domino's Pizza, Inc. (DPZ), which is a leading pizza delivery company. When deciding on a strong candidate for long-term dividend growth, I like to look for prior leading companies experiencing a pullback:

  • One-month performance: -2.29% 
  • Recent big money buy signals

Below are the big money signals that Domino's Pizza stock has made over the past year.

Chart showing the unusual institutional (UI) signals made by Domino's Pizza, Inc. (DPZ)
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, Domino's has a strong dividend history:

  • Three-year dividend growth rate: +19.6%
  • Current dividend per share: $0.78
  • Current yield: 0.92%
  • Three-year earnings growth rate: +31.26%

Lastly, I'm looking at Broadcom Inc. (AVGO), which is a leading semiconductor company. When deciding on a strong candidate for long-term dividend growth, I like to look for leading companies experiencing selling in the shares:

  • One-month performance: -17.68% 
  • Recent big money sell signals

Below are the big money signals that Broadcom stock has made over the past year. The company also guided lower recently.

Chart showing the unusual institutional (UI) signals made by Broadcom Inc. (AVGO)
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, Broadcom has a strong dividend history:

  • Three-year dividend growth rate: +76.1%
  • Current dividend per share: $3.25
  • Current yield: 5.64%
  • Three-year earnings growth rate: +262.36%

The Bottom Line

Shares of AbbVie, Analog Devices, Costco, Domino's Pizza, and Broadcom represent a potential buying opportunity for the long-term dividend investor. Given the strong historical dividend growth and recent big money sell signals from unusual trading, these stocks could be worth a spot in a yield-oriented portfolio.

Disclosure: At the time of publication, the author holds long positions in AbbVie, Analog Devices, Costco, and Domino's Pizza, but no position in Broadcom.