On a recent Morningstar Investing Insights segment unveiling the 2026 class of exceptional dividend growers, the host offered one caveat worth the entire show: “Valuation was not a component in this screen whatsoever.” A stock can clear the bar for double-digit dividend raises, a narrow or wide moat, and low or medium uncertainty, and still be priced for poor forward returns. The screen rewards capital return discipline. It says nothing about your entry point.
That gap is what should keep you reading. Buying a great dividend grower at a stretched multiple compounds the income, but a price drawdown can still erase years of payout. The fix is to overlay a valuation filter on top of the quality screen. Five names from this year’s list clear both gates: trading at 10% or deeper discounts to Morningstar fair value while raising the dividend aggressively.
The five names that pass both tests
The discounts run deepest at Zoetis (NYSE: ZTS | ZTS Price Prediction) at 32%, Accenture (NYSE: ACN) at 30%, Domino’s Pizza (NASDAQ: DPZ) at 23%, Intuit (NASDAQ: INTU) at 19%, and SBA Communications (NASDAQ: SBAC) at 13%.
The fundamentals support the gap.
Accenture posted Q2 FY26 revenue of $18.04 billion, up 8%, with record bookings of $22.1 billion, and raised its quarterly dividend 10% to $1.63. Intuit grew Q2 revenue 17% to $4.651 billion and lifted the payout 15%. Both stocks are deep in the red year to date.
Why the discount math matters more than the dividend math
Take a concrete example. Suppose you put $10,000 into Zoetis at $114. That buys roughly 88 shares paying $2.12 annually, an entry yield near 1.9%.
Had you bought a year ago near $154, you would own roughly 65 shares, earning the same dividend per share on a higher cost basis. Same company, same payout, permanently lower yield on cost.
That is the math the screen ignores.
The discount widens the runway for total return, too. Zoetis trades at a forward P/E of 19 against an analyst target of $150. Accenture sits at a forward P/E of 14 with a target of $251. Intuit’s forward multiple is 15 with a target of $594.
Who this list fits, and who it hurts
The setup fits an investor with a 7-to-15-year horizon to fund future income. A 50-year-old building taxable retirement income can buy a 1-to-2% starter yield today and let double-digit raises do the heavy lifting. Domino’s quarterly dividend climbed from $1.51 in 2024 to $1.99 in 2026. SBA Communications raised 13% in April to $1.25, with the payout still only ~41% of AFFO. That leaves room to keep raising.
The same list hurts a 70-year-old who needs cash flow today. Zoetis, at a 1.9% yield, does not cover current bills, regardless of growth rate. Retirees drawing portfolios are usually better served pairing a sleeve of these growers with higher current-yield holdings, Treasury ladders, or covered-call funds that prioritize today’s check over tomorrow’s raise.
What to do with this
Three steps.
- First, pull the Morningstar fair value estimate for each name before buying and confirm the discount is still there. Gaps close.
- Second, project your yield on cost at year 10 using a conservative 8% annual growth assumption, well below the recent 10% to 15% raises across this group, and compare it against what a 10-year Treasury would pay you on the same dollars.
- Third, separate quality and valuation in your own process going forward. The host’s caveat is the lesson: a list of exceptional dividend growers is only a starting point for further research. These five names are simply where both filters happen to overlap right now.
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