2 dividend growth stocks I'm waiting to pounce on in this turbulent market

Volatility has returned to the markets with a vengeance in recent weeks with some big one-day drops and bounces. I'm currently looking at the FTSE 100 at 7,250, which is 2% up from its recent low at the end of last week but 7% below its all-time high of 7,779 a month ago.

I've got my eye on two reliable dividend growth stocks, one of which announced a "strong performance" in its annual results today, including a 21st successive year of dividend growth. It also said: "We look forward to the future with confidence."

Health and wealth

Shares of Primary Health Properties(LSE: PHP) have nudged modestly higher to 115.5p on the back of today's results but are still below -- currently by 6.5% -- their previous high of 123.5p.

This investor in modern primary health facilities in the UK and Ireland had a portfolio of 306 properties at the year-end, valued at £1.36bn. It acquired 10 properties during the year at a cost of £72m and said it has a strong pipeline of targeted acquisitions of £150m.

Year-end net asset value (NAV) per share stood at 100.7p -- a 10.5% uplift -- and earnings per share (EPS) increased 8.3% to 5.2p. The stock's 15% premium to NAV and price-to-earnings (P/E) ratio of 22 may look on the expensive side, but the valuation reflects the attractive dynamics of this sub-sector of real estate.

Secure, long-term cash flows are behind the company's excellent record of annual dividend growth and the latest payout of 5.25p (up 2.4% on last year) gives a trailing yield of 4.5%. The board has already declared a first quarterly dividend for 2018. This points to a full-year payout of 5.4p and a prospective yield of 4.7% for investors today. It makes the stock look very buyable to my eye.

Value in infrastructure

There's been a good bit of news from 3i Infrastructure(LSE: 3IN) since I wrote about its half-year results in September and described it as a stock I'd happily buy for the long term. The news since only reinforces my view.

The company invests in infrastructure businesses and assets that generate long-term yield and capital growth, principally in the UK/Ireland and Continental Europe. It said recently that its exposure to projects serviced by collapsed Carillion is less than 1% of its investment portfolio and that it will make no provisions against this exposure. Good news.

Even better news was the announcement in December of two divestments: its stake in Finnish power grid company Elenia for £725m (compared with a value on the books of £498m) and its stake in Anglian Water for £395m (book value £288m). The company estimates a post-divestments pro forma NAV per share of 199p. The shares are currently trading at about this level, having been pulled down 7% in line with the recent market decline.

Subject to completion of the divestments, the board expects to return surplus cash of between £400m and £450m (39p-44p a share) to shareholders. This in addition to a target dividend of 7.85p (yield 3.9%) for the year ending 31 March. Another solid dividend growth stock, 3i's payout is forecast to advance to 8.1p (yield 4.1%) for fiscal 2019.

5 elite blue-chips

I see 3i and Primary Health as solid companies outside of the FTSE 100. I reckon they could sit nicely in a portfolio alongside five elite blue-chip businesses identified by the experts at the Motley Fool.

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G A Chester has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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