In this article, we will take a look at the 10 Best Dividend Growth Stocks to Buy and Hold for 3 Years.
In volatile markets, investors may want to focus on companies with strong dividend growth as a way to add some downside protection to their portfolios, according to Trivariate Research in a CNBC report published on May 19.
“Historically, when investors wanted to get defensive within their equity portfolios, they looked for more predictable revenue streams,” Trivariate founder Adam Parker wrote in a recent report. He noted that investors typically turned to pharmaceutical companies, telecoms, consumer staples, and utilities for that kind of stability. That approach is becoming more difficult today.
Parker said, “One major challenge today is that this traditional defensive part of the market has never been smaller.”He added that these defensive sectors made up nearly 30% of the S&P 500 market capitalization 25 years ago. Today, they account for just over 10%.
Trivariate focused on stocks that have delivered steady dividend growth for at least the past five years and are expected to keep increasing those payouts. The firm also looked for companies projected to deliver sales growth of at least 7% and earnings growth of 10%.
Given this, we will take a look at some of the best dividend growth stocks to invest in.
Our Methodology:
For this list, we screened for dividend companies that have strong dividend growth histories. From there, we identified companies with a 5-year dividend growth rate of over 10%. Finally, we picked companies that have recently reported noteworthy developments likely to impact investor sentiment. These companies are also popular among elite funds and analysts.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 498.7% since May 2014, beating its benchmark by 303 percentage points (see more details here).
10. Energy Transfer LP (NYSE:ET)
5-Year Dividend Growth Rate: 11.85%
On May 14, Barclays raised its price recommendation on Energy Transfer LP (NYSE:ET) to $23 from $22. It reiterated an Overweight rating on the stock. The firm said it sees an “increasingly constructive backdrop” for U.S. crude production. In a research note, the analyst told investors that Energy Transfer “remains undervalued given fundamental tailwinds on multiple fronts.”
During Energy Transfer’s Q1 2026 earnings call, Co-CEO Thomas Long said the company generated nearly $4.9 billion in adjusted EBITDA for the quarter. He also noted that distributable cash flow attributable to partners, as adjusted, reached about $2.7 billion. Long added that the company had increased its 2026 adjusted EBITDA guidance and now expected it to range between roughly $18.2 billion and $18.6 billion. He also said Energy Transfer’s 2026 organic growth capital guidance was projected to come in between approximately $5.5 billion and $5.9 billion.
According to Long, the quarter benefited from strong operating trends across several parts of the business. He pointed to record volumes in midstream gathering, NGL fractionation, NGL exports, and crude oil transportation.
Energy Transfer LP owns and operates a diversified portfolio of energy assets across the United States. Its network includes more than 140,000 miles of pipelines and related energy infrastructure. The company’s system spans 44 states and covers all major U.S. production basins.
9. Accenture plc (NYSE:ACN)
5-Year Dividend Growth Rate: 13.11%
On May 20, HUMAIN and Accenture plc (NYSE:ACN) announced a collaboration under which Accenture will serve as a strategic reinvention and AI partner in Saudi Arabia. The partnership is aimed at helping HUMAIN expand its AI capabilities across the Kingdom while accelerating AI adoption across government organizations and businesses. The companies said the collaboration is designed to move organizations beyond early-stage AI testing and pilot programs toward operational, production-grade AI systems that can be used across day-to-day operations.
The partnership combines HUMAIN’s locally operated AI stack, including next-generation data centers, high-performance infrastructure, cloud platforms, advanced AI models, and applied AI solutions, with Accenture’s experience in designing, building, and managing AI-driven transformation projects.
Together, the two companies plan to help institutions across Saudi Arabia integrate AI into core operations in a secure and responsible way while remaining aligned with regulatory requirements.
As many organizations are still experimenting with AI, HUMAIN and Accenture said they intend to focus on deploying AI at scale and turning AI ambitions into measurable business outcomes.
Accenture plc (NYSE:ACN) is a solutions and services company that works with major enterprises on digital transformation and AI adoption. The company combines the expertise of its approximately 786,000 employees with its proprietary platforms, assets, and ecosystem partnerships to help businesses strengthen their digital foundation and create value through AI across the enterprise.
8. American Express Company (NYSE:AXP)
5-Year Dividend Growth Rate: 14.67%
On May 22, Loop Capital initiated coverage on American Express Company (NYSE:AXP) with a Buy rating. The firm also set a $389 price target on the stock. The firm said it sees a “stable to improving” outlook for the financial sector and named American Express as its top pick. The analyst told investors in a research note that the stock could continue to move higher despite uncertainty in the broader macro environment. According to the firm, concerns about AI-driven layoffs have pressured American Express’s valuation multiple and created what it views as an attractive entry point for investors.
Loop Capital also said American Express has a broader customer base, which it believes should limit the impact that AI-related job losses could have on the company’s revenue growth.
In separate news on May 20, American Express and Fanatics announced a strategic partnership. Under the agreement, American Express will become the Official Payments Partner across select Fanatics online and retail locations worldwide. The company will also serve as a presenting sponsor for Fanatics Fest, one of the largest annual sports fan festivals held in New York City.
The companies also announced the upcoming launch of the new Fanatics American Express® Card, which will run on the Amex Network and is expected to launch later this year. The card is designed to give sports fans additional rewards and experiences tied to their fandom.
American Express Company is a global payments and premium lifestyle brand powered by technology. Its businesses include card issuing, merchant acquiring, and payment network services, serving consumers, small businesses, mid-sized companies, and large corporations around the world.
7. Parker-Hannifin Corporation (NYSE:PH)
5-Year Dividend Growth Rate: 15.06%
On May 21, Reuters reported that US investment firm KKR had agreed to sell the aerospace division of Circor to Parker-Hannifin Corporation (NYSE:PH) for $2.55 billion.
Circor Aerospace manufactures components for commercial aircraft, and the acquisition is expected to strengthen Parker-Hannifin’s position in higher-margin aerospace systems. The transaction is expected to close during the second half of 2026. KKR said that once the deal closes, all Circor employees will receive a dividend funded through a portion of the sale proceeds. The payment is intended to recognize the strong performance delivered by the company’s industrial and naval businesses.
The investment firm also said it sees significant room for growth in both businesses going forward. KKR acquired Circor through its North America Fund XIII in 2023. Even after the aerospace sale, the firm plans to retain ownership of Circor’s naval and industrial businesses, keeping exposure to what it described as strategically important end markets.
The transaction marks KKR’s fourth industrials exit this year.
Parker-Hannifin Corporation specializes in motion and control technologies. The company designs, manufactures, and provides aftermarket support for engineered solutions across its Diversified Industrial and Aerospace Systems segments.
6. Eli Lilly and Company (NYSE:LLY)
5-Year Dividend Growth Rate: 15.23%
In a CNBC report published on May 21, Eli Lilly and Company (NYSE:LLY) said its experimental obesity drug, retatrutide, cleared a major late-stage clinical trial. The results moved the company closer to seeking regulatory approval for the treatment. The Phase 3 trial showed that patients without diabetes who received the highest dose of the weekly injection lost an average of 28.3% of their body weight over 80 weeks. More than 45% of participants lost at least 30% of their weight. Analysts said those results were comparable to outcomes often seen with bariatric surgery.
Retatrutide is viewed as a next-generation obesity treatment because it targets three hormones, GLP-1, GIP, and glucagon. Current drugs like Wegovy and Zepbound target fewer pathways. The strong trial data increased expectations that retatrutide could become one of the most effective weight-loss treatments on the market. The report also said that safety concerns seen in earlier studies appeared to ease in the latest trial. Patients still reported side effects such as nausea, diarrhea, vomiting, and constipation, though most were gastrointestinal and considered manageable. Fewer participants experienced the abnormal skin sensations that had raised concerns in previous studies.
After the results were released, Lilly’s shares moved higher as investors viewed the data as another important step in strengthening the company’s position in the fast-growing obesity drug market. The company is expected to continue additional studies and could potentially launch retatrutide following regulatory review.
Eli Lilly and Company develops, manufactures, and markets medicines through a single business segment focused on human pharmaceutical products.
5. Lowe’s Companies, Inc. (NYSE:LOW)
5-Year Dividend Growth Rate: 15.35%
On May 21, Telsey Advisory Group lowered its price recommendation on Lowe’s Companies, Inc. to $280 from $295. It reiterated an Outperform rating on the stock. The firm said Lowe’s continues to execute its strategy despite uncertainty in the broader economy and ongoing weakness in the housing market. According to the analyst, the company’s approach is helping drive positive comparable sales results. DIY consumer spending also remained stable, and Lowe’s kept its 2026 guidance unchanged. Telsey added that it believes the higher end of the company’s EPS outlook remains achievable.
On the same day, Piper Sandler lowered its price goal on LOW to $276 from $300. It maintained an Overweight rating after the company reported in-line results and reaffirmed its guidance. The firm noted that the home improvement sector remains slow, though Lowe’s still posted its fourth straight quarter of positive comparable sales. Piper said the company’s Q2 EPS outlook came in below expectations, but added that margin pressure tied to acquisitions should begin easing in the second half of the year. The firm also said Lowe’s full-year guidance remains reasonable. Looking ahead to 2027, Piper reduced its bullish stance slightly and lowered its valuation multiple assumption from 21 times to 20 times to better reflect Lowe’s historical discount to the S&P’s valuation.
Lowe’s Companies, Inc. sells products used for construction, maintenance, repair, remodeling, and decorating.
4. Applied Materials, Inc. (NASDAQ:AMAT)
5-Year Dividend Growth Rate: 16.24%
On May 19, Argus Research analyst Jim Kelleher raised the firm’s price recommendation on Applied Materials, Inc. (NASDAQ:AMAT) to $500 from $420. It reiterated a Buy rating following the company’s Q2 earnings beat last week. The analyst said Applied Materials appears well-positioned for long-term growth, supported by cyclical, demographic, and broader industry trends. According to the research note, one of the biggest drivers is the rising demand for large CPU and GPU configurations used to power large language models for generative AI and, more recently, agentic AI. The firm also pointed to the growing push for onshoring semiconductor manufacturing, which is increasingly being viewed as a national security priority.
On May 18, Morgan Stanley downgraded AMAT to Equal Weight from Overweight and assigned a $502 price target. The analyst said the magnitude of the firm’s DRAM wafer fab equipment revisions has narrowed, while its outlook on NAND wafer fab equipment revisions has improved. Morgan Stanley added that it expects Applied Materials to gain market share in 2026. Still, the firm noted that its growth forecast for the company is in line with the broader wafer fab equipment market in 2027. Because of that, Morgan Stanley believes the stock’s valuation discount relative to peers is unlikely to narrow in the near term.
Applied Materials, Inc. provides materials engineering solutions for the semiconductor, display, and related industries. The company supplies equipment, services, and software through its Semiconductor Systems and Applied Global Services segments.
3. Tractor Supply Company (NASDAQ:TSCO)
5-Year Dividend Growth Rate: 22.7%
On May 5, Piper Sandler analyst Peter Keith downgraded Tractor Supply Company (NASDAQ:TSCO) to Neutral from Overweight. It cut the stock’s price target to $36 from $51. The firm said it was downgrading the stock after recommending the shares for the past eight years. Keith noted that companion animal trends could remain under pressure for several years as rising pet ownership costs weigh on demand. He also told investors in a research note that Piper sees risk to Tractor Supply’s 2026 guidance following what it described as a “weak” first-quarter report.
On April 27, TD Cowen analyst Max Rakhlenko lowered the firm’s price recommendation on TSCO to $38 from $53. The analyst reiterated a Hold rating on the shares. The firm said Tractor Supply is working to expand initiatives aimed at reaccelerating growth in the Companion Animal category and other parts of the business, though it believes progress will take time. Cowen added that comparable sales could stay pressured over the medium term. The firm also said it expects the stock to remain range-bound in the near term and views second-quarter EPS as a major catalyst.
Tractor Supply Company is an American rural lifestyle retailer focused on serving recreational farmers and ranchers. The company operates stores under the Tractor Supply Company and Petsense by Tractor Supply brands.
2. The TJX Companies, Inc. (NYSE:TJX)
5-Year Dividend Growth Rate: 27.54%
On May 21, Telsey Advisory analyst Dana Telsey raised the firm’s price recommendation on The TJX Companies, Inc. (NYSE:TJX) to $185 from $175. He reiterated an Outperform rating on the shares. The analyst said the company delivered a “strong start” to FY27, with first-quarter EPS coming in above expectations. The performance was driven by solid sales growth and favorable margins. Telsey also noted that broad-based comparable sales growth highlighted steady demand across the company’s portfolio.
On the same day, BTIG analyst Bob Drbul raised the firm’s price goal on TJX to $190 from $185. The analyst kept a Buy rating on the shares following the company’s Q1 earnings beat. Drbul said performance was broad-based across banners, with all segments exceeding expectations. In a research note, the analyst added that all divisions posted higher customer transactions, while profitability improved across banners. The gains were supported by stronger merchandise margins and expense leverage.
The TJX Companies, Inc. is an off-price apparel and home fashions retailer operating in the U.S. and international markets. Its segments include Marmaxx and HomeGoods in the U.S., along with TJX Canada and TJX International, which includes operations in Europe and Australia.
1. The Cigna Group (NYSE:CI)
5-Year Dividend Growth Rate: 42.40%
On May 22, UBS raised its price recommendation on The Cigna Group (NYSE:CI) to $400 from $375. It reiterated a Buy rating on the shares. The analyst said managed care organizations broadly increased guidance after stronger-than-expected Q1 results. Favorable respiratory trends and seasonal cost patterns helped support performance during the quarter. The analyst also noted that improved Medicare Advantage rates, steadier ACA exchange enrollment, and modest Medicaid outperformance strengthened confidence in margin recovery. At the same time, the sector continues to deal with cost pressures tied to specialty drugs, GLP-1 treatments, and behavioral health expenses, according to the research note.
On May 20, Morgan Stanley raised its price goal on CI to $361 from $355. It kept an Overweight rating on the stock. The firm made the change after meetings with management that, in its view, “reinforced the underappreciated” specialty opportunity. The analyst added that the company’s September investor day is expected to highlight its growing long-term focus on Specialty businesses.
The Cigna Group operates as a global health company with two business segments: Evernorth Health Services and Cigna Healthcare.
