11 Dividend Growth Stocks Delivering Double-Digit Increases

Dividend growth stocks with even so-so current yields can become powerful income holdings thanks to payout hikes over time and price-upside potential.

Concept of money growing
(Image credit: Getty Images)

One common trap that dividend investors can fall into is chasing stocks with high yields when they should be buying dividend growth stocks that can promise years of steady income raises.

Thanks to the magic of compounding, a dividend stock with a low yield but increasing annual payouts can deliver superior returns to a high-yield stock where the payout remains flat. A high current yield also increases the stock's interest rate risk, says Argus Research, while an unusually lofty yield can also be a sign that the company is struggling and the dividend is in jeopardy.

"Though the income appears attractive, the share prices of high-yield stocks may be at risk," write Argus Research's John Eade, director of portfolio strategies, and Jim Kelleher, director of research. "Indeed, if interest rates drift higher, risk-averse equity investors could be drawn to the relative safety of bonds and may sell their high-yield stocks."

The dividend-growth stocks that Argus Research typically likes have lower yields, often in the 1.0% to 2.5% range (with some exceptions, of course). Although the yields are not particularly high, management teams may be more likely to boost the payouts over time, as earnings grow. The objective is to find companies that are growing their dividends faster than the market average over time. Such firms are poised for outperformance, Eade and Kelleher say.

"We expect select high-quality, well-managed companies to continue to raise their dividends at aggressive (read: double-digit) rates, as part of their value proposition to investors," the duo writes.

Argus Research taps dozens of companies for its dividend growth model portfolio. We dove into 11 names that represent the highlights of the group. Have a look at some of the best dividend growth stocks you can buy.


Data is as of Oct. 29. Dividend yields are calculated by annualizing the most recent payout and dividing by the share price. Stocks listed in reverse order of dividend growth rate.

Dan Burrows
Senior Investing Writer, Kiplinger.com

Dan Burrows is Kiplinger's senior investing writer, having joined the august publication full time in 2016.

A long-time financial journalist, Dan is a veteran of SmartMoney, MarketWatch, CBS MoneyWatch, InvestorPlace and DailyFinance. He has written for The Wall Street Journal, Bloomberg, Consumer Reports, Senior Executive and Boston magazine, and his stories have appeared in the New York Daily News, the San Jose Mercury News and Investor's Business Daily, among other publications. As a senior writer at AOL's DailyFinance, Dan reported market news from the floor of the New York Stock Exchange and hosted a weekly video segment on equities.

Once upon a time – before his days as a financial reporter and assistant financial editor at legendary fashion trade paper Women's Wear Daily – Dan worked for Spy magazine, scribbled away at Time Inc. and contributed to Maxim magazine back when lad mags were a thing. He's also written for Esquire magazine's Dubious Achievements Awards.

In his current role at Kiplinger, Dan writes about equities, fixed income, currencies, commodities, funds, macroeconomics, demographics, real estate, cost of living indexes and more.

Dan holds a bachelor's degree from Oberlin College and a master's degree from Columbia University.

Disclosure: Dan does not trade stocks or other securities. Rather, he dollar-cost averages into cheap funds and index funds and holds them forever in tax-advantaged accounts.