Best Dividend Stocks to Buy for Dependable Dividend Growth

How do you find the best dividend stocks to buy? Income investors know there's no substitute for regular dividend increases over the long haul.

Best Dividend Stocks to Buy for Dependable Dividend Growth
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Buy-and-hold dividend growth investors know something about the best dividend stocks to buy that less experienced yield-hunters don't: it pays to be patient when you're investing for income.

Shares in companies that raise their 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.

Companies with long histories of annual dividend growth also offer some peace of mind. After all, any company that manages to raise its dividend year after year – through recession, war, market crashes and more – is demonstrating both its financial resilience and its commitment to returning cash to shareholders.

"Investing in companies with sustainable dividend growth can help augment total returns and reduce volatility while providing a growing income stream," write David Park and David Chalupnik, portfolio manager and head of U.S. active equities portfolio management, respectively, at Nuveen.

Put another way, dividend growers not only go along for the ride in bull markets, but they also tend to hold up better in market drawdowns.

How do you find the best dividend stocks to buy?

best dividend stocks to buy

(Image credit: Getty Images)

If you're looking to add dependable dividend growers to your portfolio, you can start by checking out the S&P 500 Dividend Aristocrats.

The S&P 500 Dividend Aristocrats are an index of 67 companies in the S&P 500 index that have raised their payouts annually for at least 25 consecutive years. 

Although they're scattered across pretty much every sector of the market, they do all share one thing in common: a commitment to reliable and long-term dividend growth.

There were two changes to the Dividend Aristocrats announced in January 2024. Walgreens Boots Alliance (WBA) was removed from the index after the pharmacy chain slashed its dividend by almost half in late 2023. WBA had raised its dividend annually without fail for almost a half-century before the cut. 

At the same time, industrials supplier Fastenal (FAST) was added to the Dividend Aristocrats in recognition of its quarter-century streak of annual dividend hikes.

Other changes to the Dividend Aristocrats over the past year include the removal of VF Corp. (VFC) and the addition of Kenvue (KVUE), which was spun off from fellow Aristocrat Johnson & Johnson (JNJ). 

As for more recent developments, 3M's (MMM) time as a Dividend Aristocrat is set to come to an end. The company spun off its Solventum (SOLV) healthcare business to shareholders in April. The latter isn't a quarterly dividend payer, which means MMM shareholders will see their total take in dividends from these MMM-related securities decline sharply. 

As we'll see below, 3M had raised its payout for 64 consecutive years. The dividend cut means this Dow Jones stock is on the Aristocrats chopping block when rebalancing time rolls around in January.

Happily, it's unusual to see a long-time Aristocrat fall. That's because the Dividend Aristocrats have been among the best dividend stocks to buy for reliable income growth over the past several decades. In other words, it makes them a good place to start if you're looking to add dividend battleships to your long-term portfolio.

Alternatively, investors can gain exposure to every stock in the S&P 500 Dividend Aristocrats index via the ProShares S&P 500 Dividend Aristocrats ETF (NOBL). The exchanged-traded fund with $11.6 billion in assets under management has an expense ratio of 0.35%. 

Have a look at all the stocks in S&P 500 Dividend Aristocrats index in the table below – and be sure to keep scrolling for more information on each and every one of these dividend stalwarts. 

Disclaimer

Companies are listed by the number of years they've consecutively raised their dividends, from lowest to highest. The index of Dividend Aristocrats is maintained by S&P Dow Jones Indices. Dividend history based on company information and S&P data. Dividend-growth streaks include the current year if the company announced a dividend hike as of October 25, 2024.

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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.