These are My Top 4 Dividend Growth Stocks for the Next Decade
+ The power of dividend growth investing explained.
A mix of yield, growth, and long-term safety
When most people think about dividends, they picture boring, high-yield, slow-growth companies that barely keep up with inflation. But dividend growth investing is an entirely different game.
The best dividend growth stocks give you the best of both worlds:
✅ Steady income that grows faster than inflation
✅ Exposure to high-quality, resilient businesses
✅ Long-term total return through price appreciation and reinvested dividends
In other words, these aren’t "bond proxies" — they’re compounders. Companies that grow their cash flows, reward shareholders year after year, and still have a long runway ahead.
Dividend growth investing isn't just about getting a regular payout — it's about owning high-quality businesses that consistently grow their dividends, often outpacing inflation and compounding wealth over time.
Today, I'm sharing my top 4 dividend growth stocks. These are companies with:
Strong track records of increasing dividends
Resilient business models and durable moats
Solid balance sheets and cash flow generation
Room for future dividend growth
Let’s dive in.
1. American Express – Healthy growth and brilliant longevity
Ticker: $AXP
Yield: 1.11% | 5-Yr Dividend CAGR: 12% | Payout ratio: 21%
Why I like it:
American Express is a premium financial services brand with a unique closed-loop payments network, which provides it with a structural advantage in customer insights and risk management, enabling it to serve high-value cardholders better than any other issuer. I’m especially drawn to how AmEx monetizes both sides of the transaction—earning fees from merchants and interest from cardholders—creating a more resilient and diversified revenue base than pure payment processors.
However, what really stands out is the customer base: AmEx targets affluent consumers and business clients who tend to spend more, churn less, and are willing to pay for premium services. That leads to strong pricing power and loyalty, which in turn support consistent earnings and returns on equity. Even in downturns, the company’s underwriting discipline and focus on prime borrowers help cushion against rising delinquencies.
This all creates a massive moat and really durable business model.
As a result, the long-term growth story is compelling. AmEx still has significant room to expand globally, particularly in markets where Visa and Mastercard are dominant. At the same time, its renewed focus on small business lending, travel perks, and co-branded cards keeps it relevant to the evolving needs of consumers. As a result, I see room for American Express to maintain a strong earnings growth in the mid-teens without needing heroic assumptions, making it a top pick.
In short, I like American Express because it’s a rare mix: a premium brand with a defensive core and credible growth levers. That’s the kind of business I want to own for the long haul.
Here you can find my deep dive into AmEx:
Dividend Growth Case:
Thanks to its impressive growth outlook, large moat, and strong revenue stability, American Express is not just a compelling long-term investment, but also one of my favorite dividend growth stocks.
The company offers a good starting yield of just over 1%, which is well-supported by its FCF and earnings, as reflected in a low payout ratio of 21% and a healthy balance sheet, which poses no risk. This means there is absolutely no risk of dividend cuts and plenty of room for growth, even without rapid earnings growth. Meanwhile, the company has a strong track record of consistent dividend growth, averaging a healthy 12% CAGR over the last five years.
Considering the expected EPS growth for AmEx, I am confident it will be able to maintain this low-to-mid-teens growth rate for the foreseeable future.
Ultimately, given the longevity of its business model, I remain confident that investors can continue to benefit from the power of compounding dividend growth from AXP for decades to come. As a result, this is one of my favorite dividend growth investments.
The power of dividend growth investing explained
Before we continue with the other three picks, let me highlight the power of dividend growth investing through an example using American Express.
Let’s say you bought $10,000 of American Express stock in 2005, when it paid a dividend of $0.45 per share annually. That was a yield of approximately 1.1% on cost.
Fast forward 20 years:
The dividend is now $3.28+ per share (2025), meaning your yield on cost is over 8%!
Assuming you reinvested dividends along the way, your investment has not only grown from stock price appreciation, but your annual dividend income has multiplied as well.
In other words, those same shares now yield a considerable 8% in dividends, giving you a great dividend income stream without having to lift a finger. And in the meantime, since these dividend growers are also the best compounders out there (which allows them to grow the dividend), you would have also seen brilliant share price returns. A double win.
Another great example is Berkshire and its Coca-Cola shares. Buffett's Coca-Cola stake is worth over $25 billion today (a nearly 20x capital gain), but what really illustrates the magic of compounding is the $776 million annual dividend—more than half the original investment every single year, in perpetuity.
In 1988, Berkshire began buying Coca-Cola ($KO) shares after the 1987 crash.
It acquired 400 million shares for about $1.3 billion total, or ~$3.25 per share (split-adjusted).
Berkshire has never sold a single share.
As of 2025, Coca-Cola pays an annual dividend of $1.94 per share. On 400 million shares, this means Berkshire earns $776 million per year through $KO dividends alone. That means an almost 60% yield on cost.
That is the power of dividend growth investing.
2. Broadcom, Inc. – A successful technology conglomerate with insane cash flows
Ticker: $AVGO
Yield: 0.94% | 5-Yr Dividend CAGR: 14% | Payout ratio: 39% | Consistent raises: 14 years.
Why I like it:
Broadcom is an incredible conglomerate consisting of high-value networking semiconductors and strategic enterprise software assets.
Its best‑in‑class networking chips power hyperscale data centers and AI workloads, while its bolt‑on acquisitions—like CA Technologies, Symantec, and VMware—have transformed it into a diversified tech powerhouse. This hybrid hardware‑software model gives Broadcom pricing authority and recurring revenue visibility that's uncommon in cap‑intensive semiconductor businesses.
The company’s aggressive R&D and M&A investments have built a moat that extends beyond silicon, creating integrated platforms tailored for data-heavy, mission-critical infrastructure. That stickiness is why major hyperscalers and enterprises keep returning—and often pay a premium—to Broadcom’s solutions. Contributing to that is a very strong technological edge, with best-in-class products.
On financials, Broadcom shines. With high gross margins in semis and predictability from software contracts, it delivers robust free cash flow, funding generous dividends, and consistent share repurchases. And with demand tailwinds from AI, 5G, IoT, and data center growth, it has a runway to scale both its core and acquired businesses.
In short, Broadcom stands out because it’s not just another chip maker—it’s a vertically integrated, financially disciplined innovator with multiple organic and inorganic growth levers. That kind of optionality and execution makes it a standout in any long-term, quality-focused portfolio.
Oh, yes, the company also has one of the best CEOs in the business, Hock Tan.
This company is poised for long-term success, especially in the emerging AI era. This is why I (and Wall Street) estimate that the company will continue to grow revenues at a mid-teens revenue CAGR and a high-teens EPS CAGR, while likely boosting the FCF margin to close to 50%, allowing it to generate well over $20 billion annually.
Just brilliant.
Here you can find my latest coverage of the company in greater detail:
Dividend Growth Case:
I just mentioned that Broadcom is poised to generate over $20 billion in free cash flow (FCF) this fiscal year and grow this in the years that follow. Notably, Broadcom is committed to returning the majority of these cash flows to its shareholders, including through consistent dividend payments.
Today, Broadcom shares offer a starting yield of just below 1%, which is far from impressive. However, considering the strong growth Broadcom has consistently realized, I believe this is a very decent starting yield.
You see, Broadcom has been growing its dividend for 14 consecutive years and has achieved a 14% CAGR over the last five years, which is particularly strong, especially considering the large acquisitions Broadcom has made during this period. The company’s impressive margins and cash flows allow it to reward shareholders very consistently.
With a current payout ratio of 39%, the dividend remains well-covered and poses no risk. Yes, the balance sheet isn’t ideal (net debt of $58 billion), but Broadcom has a strong track record of managing this well, so I don’t view this as a considerable negative.
Furthermore, with the company anticipated to continue growing earnings and FCF at a high double-digit rate, the expectation is for Broadcom to maintain its 5-year CAGR and achieve a mid-teens dividend growth for many years to come.
Again, a really strong backdrop for investors. Broadcom is a top dividend growth pick.
Before we move on, just a quick word…
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