Top 100 Dividend Growth Stocks to Research

Dividend growth investing is one of the most reliable strategies for building long-term wealth. Companies that consistently raise their dividends tend to be profitable, well-managed, and financially disciplined. The power of compounding dividend growth means that even a modest starting yield can become a substantial income stream over 10-20 years.

This guide explains how to screen for the top 100 dividend growth stocks, what characteristics to look for, and how to evaluate whether a company's dividend growth is sustainable. Rather than providing a static list that becomes outdated, we give you the framework to build this screen yourself and run it whenever you want fresh results.

Key Takeaways

• Dividend growth rate matters more than current yield for long-term investors. A 2% yield growing at 10% annually surpasses a static 5% yield within eight years.
• The best dividend growth stocks combine reasonable yields with sustainable payout ratios and strong earnings growth.
• Companies with 10+ years of consecutive dividend increases have demonstrated commitment to returning capital across multiple market cycles.
• Free cash flow coverage of the dividend is more important than earnings coverage. Cash pays dividends, not accounting profits.

Why Dividend Growth Matters

Many investors focus solely on current dividend yield, but this approach misses the bigger picture. A stock with a 2% yield that grows its dividend by 12% per year will double its payout in six years. After 15 years, you are collecting a yield on your original cost basis that exceeds most high-yield stocks today. This compounding effect is the real engine of dividend growth investing.

Additionally, companies that consistently grow dividends tend to outperform the broader market over time. Research from Ned Davis and Hartford Funds shows that dividend growers and initiators have historically delivered higher total returns with lower volatility than non-dividend payers.

Methodology: How to Build This Screen

Here is the step-by-step framework for screening the top 100 dividend growth stocks:

1. Require a current dividend yield above 0.5%. This eliminates companies that pay token dividends. You want companies where dividends are a meaningful part of the shareholder return strategy.
2. Filter for 5+ years of consecutive dividend increases. This proves the company has a commitment to dividend growth through at least one market cycle. Ten or more years is even better and qualifies stocks as Dividend Contenders.
3. Screen for a payout ratio below 75%. Companies paying out less than 75% of earnings as dividends have room to continue raising the dividend even if earnings growth slows temporarily. Payout ratios above 90% are unsustainable long-term.
4. Sort by 5-year dividend growth rate. The compound annual growth rate of dividends per share over five years is the primary ranking metric. This captures both the pace and consistency of dividend increases.
5. Add a minimum market cap of $2 billion. Larger companies tend to have more sustainable dividends. Micro-cap dividend stocks may not have the financial stability to maintain growth through downturns.

Evaluating the Results

After running the screen, apply these additional evaluation criteria to identify the strongest candidates:

• Free cash flow payout ratio: Calculate dividends paid divided by free cash flow. If this ratio is below 60%, the dividend is well-supported by actual cash generation. This is more reliable than earnings-based payout ratios.
• Earnings growth trajectory: Dividend growth must eventually be supported by earnings growth. Companies whose dividends are growing faster than earnings will eventually need to slow dividend growth or cut the dividend.
• Balance sheet strength: Low debt companies are better positioned to maintain dividend growth during economic stress. Check debt-to-equity and interest coverage ratios to ensure the company is not stretching to fund its dividend.
• Industry and sector context: Some sectors (utilities, consumer staples, healthcare) have naturally higher dividend commitment rates than others. Compare dividend metrics within sectors for more meaningful analysis.

Common Sectors for Dividend Growth

The top 100 dividend growth stocks typically cluster in these sectors, each offering different yield and growth tradeoffs:

• Technology: Lower starting yields (0.5-1.5%) but often the fastest dividend growth rates (15-25% annually). Companies like Microsoft and Apple have been aggressive dividend growers.
• Healthcare: Moderate yields (1.5-3%) with reliable growth (8-15% annually). Pharmaceutical and medical device companies generate strong free cash flow that supports dividend growth.
• Consumer Staples: Higher yields (2-4%) with steady but slower growth (5-8% annually). These are the classic dividend growth compounders with decades-long track records.
• Industrials: Moderate yields and growth, with cyclical considerations. Industrial dividend growers tend to have strong competitive positions in their niches.

Build Your Dividend Growth Screen

Use our Dividend Screener preset as a starting point, then sort by dividend growth rate and filter for sustainable payout ratios. You can customize the view to display dividend yield, payout ratio, years of dividend growth, and earnings growth side by side. Run this screen quarterly to identify new dividend growth opportunities and monitor existing holdings.