High Dividend Growth Stocks
100 stocks · Updated Nov 3, 2026
High dividend growth stocks combine current dividend income with rapid revenue growth that funds future dividend increases — the most powerful combination for long-term total return. A growing dividend signals management confidence in cash flow durability and creates a compounding income stream that surpasses the original yield over time. Investors who bought Visa, Microsoft, or Apple in the 2010s at modest initial yields now receive double-digit yields on their original cost basis from dividend growth.
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Frequently Asked Questions
What is "yield on cost" and why does it matter?
Yield on cost is your current annual dividend divided by your original purchase price. If you bought a stock at $50 with a $1 dividend (2% yield) and the dividend grew to $3, your yield on cost is 6% — far above what new investors receive.
How do I evaluate dividend growth sustainability?
Key factors: free cash flow payout ratio (below 60%), revenue growth consistency, industry tailwinds, balance sheet strength, and management track record of dividend increases. Companies with pricing power and growing earnings have the best dividend growth prospects.
Which sectors offer the best combination of yield and growth?
Technology (MSFT, AAPL, V), healthcare (JNJ, ABBV), and consumer staples with pricing power have historically offered the best dividend growth. Financial services companies like Visa and Mastercard grow dividends rapidly from low starting yields.
How does dividend growth compare to high-yield strategies?
High-yield strategies maximize current income but often sacrifice growth. Dividend growth strategies accept lower current yields for compounding income and total return. Over 10-20 year periods, dividend growth typically produces superior total returns to high-yield strategies.