Using the power of compound interest, investing in dividend growth stocks is a tried-and-true method of increasing wealth. Investors can benefit from a rising income stream and possible capital appreciation by choosing businesses with a track record of raising dividends. Some of the best dividend growth companies are highlighted in this guide; they combine growth, stability, and consistent returns.
1. Johnson & Johnson (JNJ)
In the medical, Johnson & Johnson is a shining example of dependability. With dividend increases for more than 50 years running, J&J has proven resilient in a variety of economic cycles. Multiple revenue sources are ensured by the company’s broad operations which include consumer health items, medical equipment, and medicines.
J&J reported $17 billion in free cash flow in 2024 with more than $11 billion going back to shareholders in buybacks and dividends. Because of its strong financial standing, J&J is a great option for investors looking for growth and consistent income.
2. Procter & Gamble
With 68 years in a row of dividend hikes, Procter & Gamble has an impressive record of rewarding shareholders. Regardless of the state of the economy, the company’s wide range of user essentials which includes anything from personal care items to household cleaning agents, ensures steady demand. With a current dividend yield of roughly 2.5 percent, P&G provides investors with a steady source of income.
3. Microsoft Corporation
Microsoft is a strong dividend provider in addition to being a leader in the technology industry. The company’s varied revenue streams which include cloud computing, software, and hardware, have allowed it to raise its dividend for 19 years in a row. There is sufficient space for future dividend growth with a payout ratio of roughly thirty percent. Microsoft is a desirable choice for people looking for both growth and income because of its solid financial standing and dedication to delivering value to shareholders.
4. The Home Depot Inc
The Home Depot, the biggest home improvement shop in the world, has continuously shown impressive financial results. With a roughly 20% growth rate over the last ten years, the company has increased its dividend for 13 years in a row.
Home Depot’s continuous success can be attributed to its emphasis on hiring qualified contractors and a healthy housing market. The business keeps a balance between paying shareholders and making investments in future expansion, with a payout ratio of about 50%.
5. AbbVie Inc
The biopharmaceutical business AbbVie is well known for its dedication to dividend growth, it has raised its dividend for 50 years running. AbbVie is well-positioned for future growth due to its robust pipeline of innovative medications and savvy acquisitions even in the face of obstacles like patent expirations. The stock appeals to investors looking for a sizable income because of its high initial yield.
6. NextEra Energy Inc
Being the biggest generator of solar and wind energy worldwide, NextEra Energy is a pioneer in renewable energy. With a roughly 10% growth rate over the last ten years, the company has increased its dividend for more than 25 years in a row. NextEra’s emphasis on renewable energy sources puts them in a strong position for future growth as the demand for clean energy keeps rising. Investors should feel secure about the dividend’s sustainability because it is well-covered with a payout ratio of almost 60%.
7. Visa Inc
Since going public in 2008, Visa, a multinational payments technology business, has continuously raised its dividend. The growing global adoption of digital payments is the primary reason of the company’s robust earnings growth. There is a substantial amount of space for future dividend increases with a payout ratio of about 20%. For investors seeking dividend growth, Visa is an appealing option due to its strong market position and continuous foray into new payment technology.
8. General Motors Co.
Recently, General Motors has shown a strong commitment to giving stockholders their money back. The business approved a $6 billion share repurchase plan and declared a 25% increase in its quarterly dividend.
This action shows how confident GM is in its business strategy and financial stability. General Motors is well-positioned for future growth due to its strategic objectives and strong cash sheet even in the face of obstacles like high labor costs and possible price reductions in North America.
9. MPLX LP
The energy infrastructure business MPLX has a remarkable dividend yield of almost 7%. With a 10% increase in net income to $4.3 billion and an 8% increase in adjusted EBITDA to $6.8 billion, the company has shown impressive financial performance. Dividend investors looking for income in the oil industry find MPLX appealing because of its consistent cash flows and substantial dividends.
10. Brown & Brown Inc
The insurance brokerage company Brown & Brown just broke out from a cup-without-handle base and into a buy zone. The business has exceeded previous earnings and revenue projections and has a solid track record of consistent earnings. Investors looking for defensive companies with growth potential are taking notice of Brown & Brown which has a composite rating of 96 and an Earnings Per Share Rating of 95.
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