In this article, we will take a look at some of the next generation dividend aristocrat stocks.
The next generation of dividend aristocrats can often be spotted through their consistent dividend growth, solid starting yields, and overall stability, even if they haven’t yet hit the 25-year mark of annual increases. While traditional dividend stocks— both established and emerging— remain reliable investments, many other sectors also present strong dividend opportunities with varied growth and return profiles that support both income generation and diversification.
Midstream energy companies and modern REITs, for example, offer appealing dividends linked to unique growth trends. Meanwhile, tech firms are becoming more dividend-friendly, making the sector an increasingly promising space for income-focused investors.
According to a report by ClearBridge Investments, many of these up-and-coming dividend aristocrats are already delivering impressive returns. In some cases, an initial $10,000 investment at the start of their dividend growth streak is now generating nearly that amount annually in dividends alone. Even though they haven’t yet earned the official “dividend aristocrat” title, their strong performance highlights why they deserve a place in a thoughtfully built income-focused portfolio today.
Given this, we will take a look at some of the best next generation dividend aristocrat stocks.
Our Methodology
For this article, we scanned for companies that have raised their dividends between 10-24 years consistently. From the resultant list, we picked 15 stocks with the highest number of hedge fund investors, as per Insider Monkey’s database of Q1 2025. The stocks are ranked in ascending order of hedge funds having stakes in them.
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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
15. Tractor Supply Company (NASDAQ:TSCO)
Number of Hedge Fund Holders: 37
Tractor Supply Company (NASDAQ:TSCO) is one of the best next generation dividend aristocrat stocks. The company continued to deliver solid returns to its shareholders, distributing over $1 billion in fiscal year 2024. This included $472.5 million in dividends and $560.8 million spent on share buybacks. With a dividend payout ratio of around 43%, the company maintains a healthy balance between rewarding investors and preserving capital for future growth.
In the first quarter of 2025, Tractor Supply Company (NASDAQ:TSCO) returned another $216.4 million to shareholders, $122.4 million through cash dividends and $94 million via the repurchase of approximately 1.7 million shares. These returns were supported by strong cash flow, with the company generating $216.7 million in operating cash during the quarter.
On May 15, Tractor Supply Company (NASDAQ:TSCO) announced a quarterly dividend of $0.23 per share, consistent with the previous payout. It has now increased its dividend for 16 straight years. The stock supports a dividend yield of 1.79%, as of June 14.
Tractor Supply Company (NASDAQ:TSCO) is one of the largest rural lifestyle retailers in the United States. With a legacy spanning over 85 years, the company has remained committed to meeting the needs of hobby farmers, ranchers, homeowners, gardeners, pet lovers, and anyone who embraces the “Life Out Here” way of living.
14. Cummins Inc. (NYSE:CMI)
Number of Hedge Fund Holders: 53
Cummins Inc. (NYSE:CMI) is among the best next generation dividend aristocrat stocks. Many income-focused investors tend to overlook Cummins as a dividend stock, often recognizing it solely for its role as a leading manufacturer of diesel and natural gas engines. However, the company is a reliable dividend payer with strong potential for future growth in distributions.
Cummins Inc. (NYSE:CMI) has laid out a firm commitment to shareholder returns. In its FY24 earnings report, the company reiterated its goal of returning 50% of its operating cash flow to shareholders over the long term. In 2024 alone, it distributed $969 million in dividends, backed by over $1.4 billion in operating cash flow, highlighting the strength of its financial foundation.
Beyond the numbers, Cummins Inc. (NYSE:CMI) has raised its dividend for 15 straight years, positioning it as a serious contender for future Dividend Aristocrat status.
Despite facing a legal challenge in 2023, the company made notable progress in 2024. It exited its filtration business, partnered with Isuzu to launch a new engine for Japan’s medium-duty trucks, and introduced new products aimed at the high-growth data center market, signaling a year of strategic transformation and forward momentum.
Cummins Inc. (NYSE:CMI) offers a quarterly dividend of $1.82 per share and has a dividend yield of 2.28%, as of June 14.
Cummins Inc. (NYSE:CMI), a global leader in power solutions, operates through five key business segments: Engine, Components, Distribution, Power Systems, and its clean energy division, Accelera by Cummins.
13. The Kroger Co. (NYSE:KR)
Number of Hedge Fund Holders: 64
The Kroger Co. (NYSE:KR) is one of the best next generation dividend aristocrat stocks. The company’s dividend profile has become increasingly appealing to income-focused investors, with strong potential for continued growth.
Over the past five years, The Kroger Co. (NYSE:KR) has doubled its quarterly dividend to $0.32 per share, resulting in a yield of 1.9%. Management has signaled that further increases are likely, backed by an ongoing share repurchase program aimed at delivering an annual shareholder return of 5% to 6%, a strategy that could also support future stock appreciation.
These dividends are supported by healthy free cash flow. For fiscal year 2025, The Kroger Co. (NYSE:KR) projects adjusted free cash flow between $2.8 billion and $3.0 billion, reinforcing its commitment to boosting dividends and enhancing shareholder returns. In FY24 alone, it distributed $883 million in dividends to shareholders.
The Kroger Co. (NYSE:KR) has been growing its dividends for the past 18 consecutive years.
The Kroger Co. (NYSE:KR), commonly known as Kroger, is an American retail giant that runs a wide network of supermarkets and multi-department stores across the country.
12. Lockheed Martin Corporation (NYSE:LMT)
Number of Hedge Fund Holders: 68
Lockheed Martin Corporation (NYSE:LMT) is among the next generation dividend aristocrat stocks. The company’s business segments produce substantial cash flow. After allocating funds toward research and capital investments, the company returns value to shareholders primarily through dividends and share buybacks.
Buybacks reduce the total number of shares available, which increases each remaining shareholder’s stake in the company. Over the past decade, Lockheed Martin Corporation (NYSE:LMT) has cut its outstanding shares by 21%.
This reduction supports dividend growth without requiring a proportionally larger total payout, since fewer shares need to be paid. Combined with rising free cash flow, this strategy has enabled the company to steadily increase its dividend per share, up 156% over the last 10 years.
Lockheed Martin Corporation (NYSE:LMT)’s dividend profile remains strong, with 22 consecutive years of dividend growth under its belt. The stock supports a dividend yield of 2.71%, as of June 14.
Lockheed Martin Corporation (NYSE:LMT) delivers comprehensive space and mission solutions, ranging from human spaceflight to strategic defense systems, helping its customers maintain a technological edge. The company equips military forces with advanced tools across the full spectrum of deterrence and in every domain, enabling them to counter emerging threats effectively.
11. Amgen Inc. (NASDAQ:AMGN)
Number of Hedge Fund Holders: 69
Amgen Inc. (NASDAQ:AMGN) is one of the best next generation dividend aristocrat stocks. The company has built a solid track record of dividend growth, supported by consistent cash generation. In the first quarter of 2025, it generated $1.0 billion in free cash flow, up from $0.5 billion in the same period of 2024. The increase was partly due to a one-time $800 million tax payment made in Q1 2024, along with improved business performance, though partially offset by working capital timing and higher capital spending.
Amgen Inc. (NASDAQ:AMGN)’s operating cash flow for the quarter rose to $1.4 billion, compared to $0.7 billion a year earlier. During this period, the company returned $1.3 billion to shareholders through dividends, highlighting its ongoing focus on delivering value.
As of March 31, 2025, the company held $8.8 billion in cash and cash equivalents, with total debt standing at $57.4 billion.
Alongside its consistent dividend growth, Amgen Inc. (NASDAQ:AMGN) stands out as a strong dividend contender due to its modest payout ratio of 44%. This indicates it distributes a sustainable portion of its earnings as dividends while maintaining financial flexibility. Despite significant investments in research and development, the company manages to reward shareholders without straining its balance sheet.
Since initiating its dividend in 2011, the company has increased its payout every year. Over the past ten years, the dividend has grown by an impressive 201.3%. It offers a quarterly dividend of $2.38 per share and has a dividend yield of 3.22%, as of June 14.
Amgen Inc. (NASDAQ:AMGN) is focused on discovering, developing, producing, and delivering cutting-edge medicines that support millions of patients in battling some of the most challenging diseases worldwide.
10. Equinix, Inc. (NASDAQ:EQIX)
Number of Hedge Fund Holders: 70
Equinix, Inc. (NASDAQ:EQIX) is one of the best next generation dividend aristocrat stocks. The company may be better known for its real estate investment trust (REIT) operations than for its dividends, but its dividend profile is gaining serious attention. Analysts are increasingly optimistic about the company’s ability to grow its payouts, especially since REITs are often among the most attractive dividend-paying investments.
Since transitioning to a REIT in 2015, Equinix, Inc. (NASDAQ:EQIX) has raised its dividend every year. With demand for data center space accelerating due to ongoing digitalization, the company projects annual revenue growth of 8% to 10% through 2027, reaching around $12 billion. This growth is expected to fuel a 7% to 10% yearly increase in adjusted funds from operations (FFO) per share.
Backed by this rising cash flow and a payout ratio of over 67%, Equinix, Inc. (NASDAQ:EQIX) expects that it can grow its dividend at an annual rate of over 10% in the coming years. The company also expects to pay out $1.8 billion in dividends in 2025.
In the past five years, Equinix, Inc. (NASDAQ:EQIX) has raised its payouts by nearly 12%, and it currently offers a quarterly dividend of $4.69 per share. The stock has a dividend yield of 2.10%, as of June 14.
9. Honeywell International Inc. (NASDAQ:HON)
Number of Hedge Fund Holders: 75
Honeywell International Inc. (NASDAQ:HON) is among the best next generation dividend aristocrat stocks. In recent years, the company has faced setbacks, struggling to translate promising opportunities in automation, the industrial Internet of Things, aerospace, and the energy transition into significant revenue or profit growth. However, the outlook appears more encouraging moving forward.
Honeywell International Inc. (NASDAQ:HON)’s largest division is its aerospace segment, which supplies parts, components, control systems, and integrated solutions to both commercial aviation and the defense sector. Notably, the company also operates a $5 billion quantum computing business.
One of Honeywell International Inc. (NASDAQ:HON)’s standout strengths is its solid balance sheet. It has increased its dividend 15 times over the past 14 consecutive years. According to its 2025 proxy statement, the company has strategically deployed $14.6 billion across mergers and acquisitions, capital investments, share buybacks, and dividend payments to strengthen its portfolio and enhance shareholder returns.
In addition, the company’s strong cash flow provides solid backing for its dividend payments. In the first quarter of 2025, it reported operating cash flow of $600 million and free cash flow of $300 million—a 61% increase from the previous year. Its free cash flow margin of 13% further highlights a positive outlook.
Looking ahead to full-year 2025, Honeywell International Inc. (NASDAQ:HON) projects operating cash flow between $6.7 billion and $7.1 billion, with free cash flow expected to range from $5.4 billion to $5.8 billion.
The company offers a quarterly dividend of $1.13 per share and has a dividend yield of 2.02%, as of June 14.
8. Union Pacific Corporation (NYSE:UNP)
Number of Hedge Fund Holders: 85
Union Pacific Corporation (NYSE:UNP) is one of the best next generation dividend aristocrat stocks. The company’s capital investment approach focuses on strengthening its existing infrastructure to enhance safety and reliability, while also targeting specific projects to boost efficiency, productivity, and service quality. The strategy includes initiatives aimed at lowering environmental impact and improving the customer experience, all with an eye toward long-term growth.
Union Pacific Corporation (NYSE:UNP) maintains an industry-leading operating ratio and return on invested capital, with no changes to its long-term capital allocation framework. For the year, the company has outlined a $3.4 billion capital plan and expects to repurchase between $4.0 billion and $4.5 billion worth of shares.
The company reliably generates strong returns from capital projects like siding extensions, new mainlines, and terminal upgrades. This disciplined approach supports Union Pacific Corporation (NYSE:UNP)’s well-regarded dividend policy. The company has paid regular dividends for 125 consecutive years and has increased its payouts for 18 straight years, drawing the attention of income-focused investors.
Alongside its dividend payments, Union Pacific Corporation (NYSE:UNP) has aggressively bought back its own shares, reducing its total share count by 31% since 2015.
The company currently offers a quarterly dividend of $1.34 per share and has a dividend yield of 2.4%, as of June 14.
7. Intercontinental Exchange, Inc. (NYSE:ICE)
Number of Hedge Fund Holders: 94
Intercontinental Exchange, Inc. (NYSE:ICE) is among the best next generation dividend aristocrat stocks. The company recently reported a strong 13% year-over-year rise in its average daily volume for May. Open interest also hit a record high, increasing 8% to 104.6 million contracts.
Notable gains came from the Energy and Sugar markets, with daily volumes up 10% and 8%, respectively. The Financials segment stood out with a 21% jump in average daily volume, highlighting ICE’s broad-based momentum across its trading platforms.
Intercontinental Exchange, Inc. (NYSE:ICE) is a strong dividend payer, having raised its payouts for 12 consecutive years. In the past five years, the company has grown its dividend by over 10%. It pays a quarterly dividend of $0.45 per share and has a dividend yield of 1.08%, as of June 14.
Intercontinental Exchange, Inc. (NYSE:ICE) develops and runs digital platforms that link people to opportunities. It offers financial technology and data services across key asset classes, helping clients improve transparency and streamline essential workflows.
6. Oracle Corporation (NYSE:ORCL)
Number of Hedge Fund Holders: 97
Oracle Corporation (NYSE:ORCL) is one of the best next generation dividend aristocrat stocks to consider. BMO Capital Markets has turned optimistic on Oracle’s future, upgrading the stock from “Market Perform” to “Outperform.” Analyst Keith Bachman also raised his price target from $200 to $235, suggesting a potential upside of nearly 18%. Oracle shares have already climbed 20% this year, including a 13% jump following stronger-than-expected fourth-quarter results.
Bachman highlighted Oracle Corporation (NYSE:ORCL)’s $138 billion in remaining performance obligations (RPO), which surpassed the $132 billion consensus and reflected more than 100% year-over-year growth. RPO represents the total value of contracted services and products yet to be delivered, a key forward-looking indicator.
Bachman made the following comment:
“Hence, we think ORCL demand is durable over the next few years with some upside from very large partnerships. If Oracle is close to generating 100% RPO growth during FY26 and meeting revenue targets, we think shares will move higher, all else equal.”
Oracle Corporation (NYSE:ORCL) also projected its cloud business could grow more than 40% year over year and expects total revenue in fiscal 2026 to beat Wall Street forecasts. Bachman said these projections support stronger operating income growth. He noted that improvements in cloud database services and subscription revenue could act as further growth drivers, suggesting Oracle’s software segment, especially databases, is showing signs of recovery.
Oracle Corporation (NYSE:ORCL)’s dividend history is also strong, as it has paid regular dividends to shareholders since 2009. Currently, it offers a quarterly dividend of $0.50 per share and has a dividend yield of 0.93%, as of June 14.
5. The Home Depot, Inc. (NYSE:HD)
Number of Hedge Fund Holders: 102
The Home Depot, Inc. (NYSE:HD) is among the best next-generation dividend aristocrat stocks. The company’s growth has eased in recent years due to several factors. The pandemic accelerated sales as consumers invested heavily in home improvement projects, but was followed by supply chain disruptions, inflation, and higher interest rates.
For fiscal 2025, The Home Depot, Inc. (NYSE:HD) expects just a 1% increase in comparable sales and a 2.8% rise in total sales, aided by the planned opening of around 13 new stores.
Despite the slowdown, The Home Depot, Inc. (NYSE:HD) remains the dominant player in the US home improvement sector, with a presence in Canada, Mexico, and other markets. It has raised its dividend for 16 consecutive years and currently offers a 2.3% yield. Moreover, it has paid dividends for 152 quarters in a row.
Since 2016, the company’s quarterly dividend has grown from $0.69 to $2.30 per share, nearly quadrupling over the past decade.
The Home Depot, Inc. (NYSE:HD) is a retailer specializing in home improvement. It offers a broad selection of products, including building materials, tools, garden and lawn supplies, home décor, and maintenance essentials for residential and commercial use.
4. Bank of America Corporation (NYSE:BAC)
Number of Hedge Fund Holders: 117
Bank of America Corporation (NYSE:BAC) is one of the best next-generation dividend aristocrat stocks. While the company is mostly recognized for its core banking, investment, and financial services, its dividend track record is equally noteworthy, showing consistent growth over time.
In the last decade, the bank raised its dividend from $0.05 to $0.26 per share, which is a significant increase, especially for a company not typically seen as a top dividend stock. During the same period, its share price climbed more than 152%.
Looking ahead, its dividend has room to grow, supported by a strong and stable business foundation. In 2024, Bank of America Corporation (NYSE:BAC) added 1.1 million new consumer checking accounts, issued 4 million credit cards, and saw a 22% increase in consumer investment assets, reaching $518 billion. The Global Wealth division also showed strength, gaining 24,000 new clients in its Merrill Edge platform and opening 115,000 new bank accounts. By year-end, client balances hit $4.3 trillion— up 12%— while assets under management surged 52% to $79 billion.
For ten straight years, Bank of America Corporation (NYSE:BAC) has raised its dividend, reflecting its commitment to shareholder value and financial strength. This also shows that the company is able to fund operations and still return capital to investors.
Bank of America Corporation (NYSE:BAC) currently offers a quarterly dividend of $0.26 per share and has a dividend yield of 2.36%, as of June 14.
3. Eli Lilly and Company (NYSE:LLY)
Number of Hedge Fund Holders: 117
Eli Lilly and Company (NYSE:LLY) may offer a modest dividend yield, but its track record of consistent payouts remains strong.
The company’s underlying business is thriving, with analysts projecting its market value could hit $1 trillion in the coming years. Positive developments from its drug pipeline are boosting investor confidence, as promising clinical data could lead to new approvals and long-term growth. This optimism has already been reflected in the stock, which has soared over 412% in the last five years, far outpacing the broader market’s 93% return.
On the dividend front, Eli Lilly and Company (NYSE:LLY) has increased its payout for 11 consecutive years. With a payout ratio of just 44%, the company retains ample room for further dividend growth. In addition, it approved a new $15 billion share buyback program at the end of 2024, following the completion of a prior $5 billion program in the same year.
While the current yield sits at 0.73%, the strength of Eli Lilly and Company (NYSE:LLY)’s business and its growth potential make it a compelling option for income-focused investors. The company offers a quarterly dividend of $1.50 per share.
2. UnitedHealth Group Incorporated (NYSE:UNH)
Number of Hedge Fund Holders: 139
UnitedHealth Group Incorporated (NYSE:UNH) is currently facing some challenges in terms of stock price. The stock has fallen sharply, down 39% since the beginning of 2025 and over 37% in the past 12 months. That’s a steep drop for such a major company. However, despite the decline, its market value remains strong, keeping it among the world’s largest healthcare firms.
As a result of the lower share price, UnitedHealth Group Incorporated (NYSE:UNH)’s dividend yield has risen to 2.87%.
A falling stock price can increase a stock’s dividend yield, but that doesn’t necessarily mean the dividend is in danger. To judge dividend safety, it’s important to look at a company’s financials, especially the payout ratio and free cash flow.
UnitedHealth Group Incorporated (NYSE:UNH)’s payout ratio stands at a manageable 35%, suggesting it retains enough earnings to reinvest in the business or cushion against downturns. The company also generated $24.9 billion in free cash flow over the past 12 months, while paying just $7.7 billion in dividends. This indicates its dividend remains well-supported as long as business performance stays stable.
In addition, UnitedHealth Group Incorporated (NYSE:UNH) has raised its payouts consistently every year since 2011. This makes UNH one of the best next generation dividend aristocrat stocks.
1. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 159
Goldman Sachs recently highlighted a group of stocks that its analysts believe still have significant growth potential. The firm views these companies as resilient and recommends that investors act quickly to buy them, with Apple Inc. (NASDAQ:AAPL) being one of the top picks on the list.
The firm made the following comment:
“We are Buy-rated on AAPL as we believe that the market’s focus on slower product revenue growth masks the strength of the AAPL ecosystem & associated revenue durability & visibility. … .Valuation is attractive relative to AAPL’s historical multiple — both on an absolute & relative basis — and compared to key tech peers.”
Apple Inc. (NASDAQ:AAPL) is not only a tech giant but also a very solid dividend payer. The stock’s dividend yield may be low at 0.52%, but it maintains a 13-year streak of dividend growth.
While we acknowledge the potential of AAPL to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than BAC and that has 100x upside potential, check out our report about this cheapest AI stock.
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