Dividend growth investing is a proven way to build long-term wealth. It can provide consistent, increasing dividend income from financially stable, highly successful companies.
The dividend growth strategy is simple to understand. It involves buying and holding stocks of high-quality companies with a long history of increasing their dividends. The strategy’s investment rationale is that if a company can afford to raise its dividend year after year, it is probably financially sound and has confidence in its continued performance. Often, a stock’s share price will increase in concert with its payout.
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Once an investor owns a portfolio of dividend growth stocks, their income should grow as dividends increase, without the need to buy any more shares. A dependable, growing investment income can help investors combat the destructive effects of inflation.
Put simply, stocks with growing dividends provide a dependable, increasing income and an excellent potential for long-term capital appreciation. If that appeals to you, here’s a timely list of seven of the best dividend growth stocks to buy now and hold over the long run:
| Stocks | Forward Dividend Yield* |
| Exxon Mobil Corp. (ticker: XOM) | 3.2% |
| Aflac Inc. (AFL) | 1.8% |
| Coca-Cola Co. (KO) | 2.8% |
| Realty Income Corp. (O) | 5.0% |
| Walmart Inc. (WMT) | 1.0% |
| JPMorgan Chase & Co (JPM) | 2.2% |
| General Dynamics Corp. (GD) | 1.9% |
*As of Oct. 22 close.
Exxon Mobil Corp. (XOM)
XOM has a market cap of more than $530 billion, making it one of the largest publicly traded energy companies in the world. The company as we know it today was formed in 1999 when Exxon entered into a mega-merger with Mobil Oil to become Exxon Mobil Corp.
Historically, XOM was involved in the oil, refined oil products and natural gas business, but over the last two decades, the company has evolved into a global leader in all aspects of hydrocarbon energies, green energies and industrial chemicals.
Wall Street expects earnings per share growth of 2.8% in 2025.
XOM is a favorite among dividend growth investors because it’s increased its annual dividend for 42 consecutive years, and currently yields a solid 3.2%.
Aflac Inc. (AFL)
AFL is a supplemental health and life insurance company with a 41-year history of increasing its annual dividend payout.
Through its two international segments — Aflac USA and Aflac Japan — this $63 billion company sells life insurance and a unique and varied selection of supplemental health coverages to millions of customers in those two regions of the world. Its specialty is income-replacement insurance that policyholders can use for things like skilled nursing care, meals, physical therapy and more.
Back in February, AFL increased its quarterly dividend by 19% from 42 cents to its current 50 cents. That works out to an annual dividend of $2 a share and a current yield of 1.8%
BofA Securities reiterated its “buy” rating on the stock in a research report issued on Oct. 10.
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Coca-Cola Co. (KO)
There can be little doubt that Coca-Cola is the most famous non-alcoholic beverage company in the world. And, with a market cap of nearly $300 billion and estimated revenue of $46 billion in 2024, it’s one of the most successful as well.
Some of the company’s iconic brands are Coke, Diet Coke, Sprite, Fanta, Powerade and Minute Maid. But, that is just a small sample of the soda, juice, sports drinks, energy drinks and bottled water it sells to thirsty customers all over the world.
KO is a true blue-chip stock with an excellent dividend payment history. This dividend growth stock has increased its payout every year for 62 consecutive years. Its most recent dividend increase was in February when it announced a dividend hike of 5.4% from 46 cents a quarter to 48.5 cents a quarter.
The current dividend yield for KO stands at 2.8%.
Realty Income Corp. (O)
O is a real estate investment trust, or REIT, with a market cap of $55 billion.
Realty Income owns and operates more than 13,000 retail properties in population centers in the U.S. Its tenants are big box retail outlets, convenience stores and large chain pharmacies. Whenever possible it signs long-term leases of 15 years or more and it generally only rents to tenants boasting an investment-grade credit rating.
Like all REITs, the company distributes at least 90% of its taxable income back to shareholders as a dividend. What distinguishes O from other REITS is that it pays dividends monthly rather than quarterly; it has paid more than 650 consecutive monthly dividends and has raised its dividend every year for 30 straight years.
Both Stifel and UBS have a “buy” rating on the stock.
Walmart Inc. (WMT)
Walmart operates under three divisions: Walmart USA, Walmart International and Sam’s Club. In the U.S. alone, the company has more than 4,600 established brick-and-mortar locations. With its international locations and its fast-growing online segment, WMT is the world’s largest retailer by revenue.
The retailer features department stores, large supercenter stores that include grocery and garden departments, and small Walmart Neighborhood Markets. Its Sam’s Club warehouse stores are big-box, members-only locations designed to compete directly with Costco Wholesale Corp. (COST).
Analysts expect revenue growth of 14% in fiscal 2025 and 4% in fiscal 2026. The company has increased its payout for 51 straight years and currently has a dividend yield of 1%.
JPMorgan Chase & Co (JPM)
JPM is a full-service financial institution with an impressive market cap of around $630 billion.
Through its Chase banking division, it offers deposit accounts, savings vehicles and lending services to individual and commercial customers in 48 states. It also operates as an investment banking company and an asset and wealth manager catering to high-net-worth individuals.
JPM has a well-earned reputation for performance in good economic times and bad. Year to date the stock has appreciated more than 31%, nicely outpacing the S&P 500, which is up a little over 22%.
JPM is known as a dependable dividend growth stock. The current annual dividend is $5 per share, which works out to a yield of 2.2%. JPM has announced a dividend increase every year for 14 consecutive years. Over the last 10 years it has grown its distributions at a rate of 12% a year.
General Dynamics Corp. (GD)
General Dynamics is an $83 billion defense contractor and aerospace company. The company is very important to the national defense of the U.S. and many NATO countries.
The company engineers and builds the world’s most advanced military submarines, armored fighting vehicles, heavy and light weapons, and aircraft components. It serves the civilian private jet market as well. Its Gulfstream line of jets is one of the most popular private and small commercial aircraft brands in the world.
The contractor has a lesser-known technology division that designs artificial intelligence (AI)-driven information technology, communications and software solutions that military customers use to support mission control, intelligence gathering, data analysis, surveillance and other mission-critical operations.
On Oct. 12, CFRA Research reiterated its “buy” rating and maintained its $325 price target on the stock, which closed at $305.99 on Oct. 22.
Dividend growth investors appreciate the fact that GD has recorded 33 years of consecutive dividend increases. Currently, the stock is yielding 1.9%.
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7 Best Dividend Growth Stocks to Buy Today originally appeared on usnews.com
Update 10/23/24: This story was published at an earlier date and has been updated with new information.
