Top Dividend Growth Stocks for 2025 – Companies That Increase Their Payouts Every Year
"Why Dividend Growth Matters More Than Just High Yield"
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| < Dividend growth stocks, upward wealth > |
While high dividend yield stocks can give you immediate income, dividend growth stocks are the real engine for building long-term wealth.
Companies that consistently increase their dividends tend to be financially healthy, resilient during downturns, and strong compounders over time.
In this post, we’ll introduce 5 top dividend growth stocks in the U.S. for 2025—perfect for investors who want increasing cash flow year after year.
Key Takeaways
- Dividend growth stocks offer rising income and long-term capital appreciation
- Dividend increases often reflect solid earnings and management confidence
- Our 2025 picks include: JNJ, MSFT, PEP, LOW, ADP
- Great for retirement portfolios and DRIP strategies
Market Context: 2025 Trends for Dividend Growth
- Many quality companies maintained or raised dividends despite 2023–2024 volatility
- Investors are favoring dividend growers over high-yield but stagnant stocks
- Dividend aristocrats and contenders are gaining popularity as stable core holdings
Top 5 Dividend Growth Stocks for 2025
1. Johnson & Johnson (JNJ)
- Dividend Yield: ~3.1%
- 61 consecutive years of dividend increases (Dividend King)
- Healthcare stability + strong global brand
- 5-year dividend CAGR: ~6%
2. Microsoft (MSFT)
- Dividend Yield: ~0.8%
- Tech giant with consistent dividend increases since 2003
- Massive free cash flow and aggressive buybacks
- 5-year dividend CAGR: ~10%
3. PepsiCo (PEP)
- Dividend Yield: ~2.9%
- 52 consecutive years of increases (Dividend King)
- Stable cash flow from food and beverage segments
- 5-year dividend CAGR: ~7%
4. Lowe’s (LOW)
- Dividend Yield: ~2.0%
- 60+ years of payouts, rapid dividend growth in past decade
- Strong home improvement sector brand
- 5-year dividend CAGR: ~17%
5. ADP (Automatic Data Processing)
- Dividend Yield: ~2.1%
- 49 consecutive years of increases
- Steady business model in payroll and HR services
- 5-year dividend CAGR: ~12%
Why Dividend Growth Investing Works
- Growing income = inflation protection
- Often signals financial discipline & healthy balance sheets
- Works well with long-term DRIP strategies
- Historically outperforms non-dividend or stagnant dividend stocks
FAQ
Q. Should I prioritize dividend yield or dividend growth?
A. It depends on your goal. If you want immediate income, high yield may be better. For long-term compounding and rising payouts, dividend growth is key.
Q. Can I combine growth and high yield in one portfolio?
A. Absolutely. A blended approach using dividend ETFs or sector diversification can balance growth and income.
Build Long-Term Wealth One Raise at a Time
Dividend growth investing isn’t flashy, but it works.
These companies steadily increase their payouts year after year, helping you beat inflation and build passive income.
If you're investing for retirement or long-term wealth, this is the strategy to consider.
Next in the Series
Best Monthly Dividend ETFs for 2025 – Reliable Income with Lower Risk