In this article, we will take a look at the 5 Best Dividend Growth Stocks to Buy and Hold for 3 Years. For deeper discussion and analysis, read 10 Best Dividend Growth Stocks to Buy and Hold for 3 Years.
Image by Steve Buissinne from Pixabay
5. Lowe’s Companies, Inc. (NYSE:LOW)
5-Dividend Growth Rate: 15.35%
On May 21, Telsey Advisory Group lowered its price recommendation on Lowe’s Companies, Inc. (NYSE:LOW) 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. (NYSE:LOW) sells products used for construction, maintenance, repair, remodeling, and decorating.
4. Applied Materials, Inc. (NASDAQ:AMAT)
5-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. (NASDAQ:AMAT) 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-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 (NASDAQ:TSCO) 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-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. (NYSE:TJX) 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-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 (NYSE:CI) operates as a global health company with two business segments: Evernorth Health Services and Cigna Healthcare.
While we acknowledge the potential of CI 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 CI and that has 100x upside potential, check out our report about the cheapest AI stock.
READ NEXT: 10 High Quality Stocks to Buy According to Hedge Funds and 10 Best Long Term Low Risk Stocks to Buy According to Hedge Funds
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
