Dividend growth continues to slow sharply amid uncertainty over U.S. trade policy. Happily, income investors can still count on select S&P 500 names to deliver sizable and reliable hikes to their payouts.
U.S. dividend payers collectively raised their payouts by $9.8 billion in the second quarter of 2025, according to the latest data from S&P Dow Jones Indices. That's a whopping 50% decrease vs the nearly $20 million in common dividends disbursed in the first quarter. Dividend increases fell by slightly more than 50% vs the year-ago period, too.
"Dividend growth declined in Q2 2025, as concern over forward cash commitment was inhabited by the uncertainty over tariffs and its impact on sales, costs and the general economy," writes Howard Silverblatt, senior index analyst at S&P Dow Jones Indices. "Overall, companies continued to increase their dividends, but with smaller increases for those on a perceived schedule (annually)."
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
If there's a bright side to the latest figures, it's that dividend decreases declined by about 45% vs the prior quarter and year-ago period. Companies cut or suspended their dividends by $2.3 billion during the three months ended June 30, down from $4.4 billion in the second quarter of 2024.
Long-term income investors know the importance of rising dividends. Shares in companies that raise their dividend payouts like clockwork decade after decade can produce superior total returns (price change plus dividends) over the long run, even if they sport apparently ho-hum yields to begin with.
That's partly because regular dividend increases lift the yield on an investor's original cost basis. Stick around long enough, and the modest yield you received on your initial investment can hit double digits one day.
The S&P 500 Dividend Aristocrats, which are among the best dividend stocks to buy for reliable dividend growth, are a good place to start if you're interested in sussing out such dividend stalwarts. But that doesn't mean you can't find other index components bucking the trend of slower dividend growth. These seven stocks are great examples of that.
Stocks with fast-rising dividend payouts
For example, Southern Company (SO) most recently hiked its payout by nearly 3%, to $2.96 per share annually from $2.88. That's not bad for a defensive dividend payer in the normally poky utilities sector.
Moreover, Southern Company has now raised its dividend for 24 consecutive years and counting. If SO takes its streak into a 25th year, it will be eligible for inclusion in the Dividend Aristocrats index.
Meanwhile, in the more economically sensitive consumer discretionary sector, Williams-Sonoma (WSM) raised its payout by 16%, to 66 cents per share quarterly from 57 cents. The home goods retailer has now increased its dividend for 16 straight years. Over the past five years, WSM returned more than $4.1 billion to shareholders through dividends and share repurchases.
The industrials sector is not without examples of outsized dividend growth either. Pitney Bowes (PBI) lifted its payout for two consecutive quarters, most recently by 17%.
But the most encouraging signs of dividend increases are coming from the financials sector. A slew of big banks bumped their payouts substantially after passing the latest round of Federal Reserve stress tests in June.
JPMorgan Chase (JPM), a Buy-rated Dow Jones stock, hiked its dividend by 12% in the first quarter – its 15th consecutive annual increase. If that wasn't enough, the nation's biggest bank by assets raised the payout by another 7.1% in July. Taken together, JPM lifted its dividend by 20% since the end of 2024.
Other major lenders likewise committed to returning more cash to shareholders. Money center bank Citigroup (C) hiked its payout by nearly 11%, to 60 cents a share quarterly from 56 cents. Wells Fargo (WFC) raised its quarterly disbursement to 45 cents a share from 40 cents – an increase of nearly 13%.
Not to be outdone, Goldman Sachs (GS) raised its dividend by 33% – to $4 per share per quarter from $3 – after getting a passing grade from the Fed.
Importantly, this largesse on the part of the financial sector helps the case for a nice rebound in dividend growth going forward.
"The second half of 2025 could be stronger than historical averages for dividends," Silverblatt notes. "Q3 is expected to start out with an improvement from big banks as they continue to increase their dividends. The third quarter has the potential to set a new quarterly dividend payment record."
Related Content
-
Dave Ramsey Tells Us the Biggest Retirement Mistake You Can MakeThe talk-show host, author and podcaster tells Kiplinger what people can do to ensure a happy retirement.
-
Pros and Cons of Alternative Assets in Workplace Retirement PlansWhile alternatives offer diversification and higher potential returns, including them in your workplace retirement plan would require careful consideration.
-
I'm a Wealth Adviser: These Are the Pros and Cons of Alternative Investments in Workplace Retirement Accounts
While alternatives offer diversification and higher potential returns, including them in your workplace retirement plan would require careful consideration.
-
I'm a Financial Planner: If You're Within 10 Years of Retiring, Do This TodayDon't want to run out of money in retirement? You need a retirement plan that accounts for income, market risk, taxes and more. Don't regret putting it off.
-
Five Keys to Retirement Happiness That Have Nothing to Do With MoneyConsider how your housing needs will change, what you'll do with your time, maintaining social connections and keeping mentally and physically fit.
-
Six Warren Buffett Quotes Every Retiree Should Live ByThe 'Oracle of Omaha' knows a thing or two about life, investing and retirement.
-
Budget Hacks Won't Cut It: These Five Strategies From a Financial Planner Can Help Build Significant WealthCutting out your daily latte might make you feel virtuous, but tracking pennies won't pay off. Here are some strategies that can actually build wealth.
-
To Unwrap a Budget-Friendly Holiday, Consider These Smart Moves From a Financial ProfessionalYou can avoid a 'holiday hangover' of debt by setting a realistic budget, making a detailed list, considering alternative gifts, starting to save now and more.
-
Stocks Rise to End a Volatile Week: Stock Market TodayThe market's fear index reached and retreated from a six-month intraday peak on Friday as stocks closed the week well.
-
I Bought Palantir When It Was Trading at $8. Now It's $180 and I've Made $1 Million. What Do I Do?What do you do with all that appreciated Palantir stock? We asked a financial expert for advice.
