In this article, we will take a look at some of the best dividend stocks with over 20 years of dividend growth.
Historically, companies that initiate and consistently increase their dividends have delivered stronger returns than the overall market and have significantly outperformed those that cut or do not pay dividends. A report by RMB Capital found that between January 1972 and December 2018, dividend growers and initiators achieved an average annual return of 9.62%, surpassing dividend payers, which returned 8.78%. In contrast, companies that cut or eliminated their dividends during that period saw a decline of 0.79%.
Once a company begins increasing its dividends, it is usually determined to continue doing so. This commitment creates ongoing pressure to raise profits and cash flow each year, as failing to do so could force the company to reduce or suspend its dividend— a move that often triggers a sharp drop in the stock price. Because management compensation frequently includes stock options, there is a strong incentive to avoid such declines.
A company’s past record of dividend growth is often the best indicator of its future ability to sustain that trend. Another useful measure is the payout ratio, which compares dividends to earnings. A lower payout ratio generally indicates room for future dividend growth. Conversely, companies with very high dividend yields may struggle to maintain payouts during challenging periods, precisely when investors rely on that income the most. Firms with a proven history of raising dividends have demonstrated their ability not only to preserve but also to grow payouts, even during market downturns. Given this, we will take a look at some of the best dividend stocks with over 20 consecutive years of dividend growth.
Our Methodology
For this list, we screened for dividend companies that have raised their payouts for 20 consecutive years or more. From that list, we pick companies with strong balance sheets and sound financials. The stocks are ranked according to their dividend yields as of October 16.
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 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
15. Walmart Inc. (NYSE:WMT)
Dividend Yield as of October 16: 0.89%
Walmart Inc. (NYSE:WMT) is among the best dividend stocks that have raised their payouts for over 20 years. On October 15, DA Davidson reaffirmed its Buy rating and $117.00 price target for WMT after the retailer announced a partnership with OpenAI.
The firm pointed out that Walmart’s new collaboration with OpenAI, revealed on Tuesday, will also let customers shop at Walmart through ChatGPT using the Instant Checkout platform.
DA Davidson had earlier identified Walmart Inc. (NYSE:WMT) as a likely beneficiary of the growing “Agentic Commerce” trend, following OpenAI’s introduction of Instant Checkout for ChatGPT last week. According to the research firm, the company is well-positioned to thrive in this evolving commerce environment because of its large scale, which supports investment in new technology, and its proactive approach to adopting AI solutions.
The recent partnership reinforces DA Davidson’s belief that Walmart Inc. (NYSE:WMT) will stand out as a leader among traditional retailers in what it describes as the “Agentic Commerce race.”
Alongside its technological progress, Walmart Inc. (NYSE:WMT) has also drawn investor interest for its dividend track record, having increased its payouts for 52 straight years. The company currently offers a quarterly dividend of $0.235 per share and has a dividend yield of 0.89%, as of October 16.
14. Pentair plc (NYSE:PNR)
Dividend Yield as of October 16: 0.92%
Pentair plc (NYSE:PNR) is an American company known for its expertise in water treatment technologies. While it operates primarily from the United States, the company is incorporated in Ireland and holds its tax residency in the United Kingdom.
On October 15, JPMorgan lifted its price target for Pentair plc (NYSE:PNR) from $116 to $126 and maintained an Overweight rating as part of its Q3 earnings preview for the electrical equipment and multi-industry sector. The firm noted a slightly cautious stance toward the sector in the near term but added that current valuations appear more appealing. JPMorgan also mentioned a preference for value-oriented names that are currently underweighted going into the quarter.
Pentair plc (NYSE:PNR) also caught the attention of Citi analysts, who raised their price target to $133 and reaffirmed a Buy rating on the stock on October 9.
In addition to analyst optimism, Pentair plc (NYSE:PNR) stands out as a reliable dividend payer, having increased its dividends for 49 consecutive years. The company offers a quarterly dividend of $0.25 per share and has a dividend yield of 0.92%, as of October 16.
13. Caterpillar Inc. (NYSE:CAT)
Dividend Yield as of October 16: 1.12%
Caterpillar Inc. (NYSE:CAT) is one of the best dividend stocks with over 20 years of dividend growth. BofA Securities raised its price target for CAT from $517 to $594 on October 15 while keeping a Buy rating on the stock. The revision came after the firm’s review of the small turbine market, where it observed that expanding capacity has become difficult because of supplier limitations, especially for advanced parts such as single crystal turbine blades, which cannot be rapidly scaled.
According to BoFA, lead times for small turbines now stretch beyond two years, with prices trending higher, though not as sharply as for larger turbines. This environment strengthens Caterpillar Inc. (NYSE:CAT)’s Solar brand, which holds a leading position and a strong reputation within this market segment.
The firm also pointed out that growing demand from data centers could add meaningful value, much like Caterpillar’s presence in the oil and gas sector. The company’s exchange program enhances reliability through high uptime, while its mobile power units provide added flexibility.
BofA further noted that existing turbine capacity remains far below market demand. Reciprocating engines could help bridge some of the gap, but hyperscalers and developers may need to co-invest to alleviate these supply challenges.
Caterpillar Inc. (NYSE:CAT) also stands out as a dependable dividend payer, with 31 consecutive years of dividend increases. The company’s quarterly dividend comes in at $1.51 per share and has a dividend yield of 1.12%, as of October 16.
Caterpillar Inc. (NYSE:CAT) is a leading global producer of heavy machinery, manufacturing equipment used in construction and mining, along with diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives. Through its extensive dealer network, the company maintains operations across every continent.
