In this article, we discuss 25 best dividend growth stocks to buy and hold in 2024. You can skip our detailed analysis of dividend growers and their performance over the years, and go directly to read 10 Best Dividend Growth Stocks to Buy and Hold in 2024. 

When considering investments in dividends, the focus naturally shifts towards companies that consistently increase their dividend payouts. These stocks provide investors with a reliable and steadily growing income over time. Additionally, they have demonstrated resilience during economic challenges. As per a Hartford Funds report, companies that have increased or introduced dividends have consistently outperformed other stocks since 1973, especially when compared to those that reduced or eliminated their dividends. Notably, these dividend-paying stocks have exhibited higher returns with considerably lower volatility. This is why many financial experts are currently emphasizing the advantages of integrating dividend-paying stocks as a fundamental component of an equity portfolio when advising their clients.

A key driver behind the trend of companies initiating dividends lies in the aftermath of the financial crisis, where corporations experienced a surge in profits, leading to substantial growth in their balance sheets. Since the early 2000s, the cash reserves on corporate balance sheets have more than tripled. This surplus of cash provides corporations with versatile options, including expanding their operations or engaging in acquisitions. A notable choice for many companies has been to deploy the excess cash by either initiating a dividend program or augmenting existing dividend payouts. This strategic use of accumulated funds reflects a proactive approach by companies to enhance shareholder value and leverage their financial strength for sustained growth.

Two promising factors for dividend investors are the combination of strong corporate profits among S&P 500 companies and remarkably low payout ratios. According to a report by Hartford Funds, the historical average dividend payout ratio spanning 96 years has been 56.3%. However, as of December 31, 2022, the current payout ratio stands at a mere 37.1%, signifying a substantial gap with ample room for expansion. This presents a promising scenario for dividend investors, as companies appear to have considerable capacity to increase their dividend payouts, potentially leading to enhanced returns for investors in the foreseeable future.

In 2023, dividend stocks faced a period of underperformance as yields experienced a significant increase, primarily influenced by the Federal Reserve's series of interest rate hikes. However, the outlook for income investing is anticipated to undergo a shift in 2024. With growing expectations for the Federal Reserve to either pause the rate hikes or potentially implement a cut, the dynamics of income investing are poised for a potential transformation. Portfolio Manager John Baldi, overseeing the ClearBridge Dividend Strategy, has expressed an optimistic perspective on dividend stocks for the year 2024. Here are some comments from the analyst:

International Business Machines Corporation (NYSE:IBM), The Procter & Gamble Company (NYSE:PG), and Colgate-Palmolive Company (NYSE:CL) are some of the best dividend growth stocks that have grabbed investors’ attention. In this article, we will further discuss the best dividend growth stocks to buy and hold for 2024.

Photo by Viacheslav Bublyk on Unsplash

Our Methodology:

For this article, we used a stock screener to identify dividend stocks that have maintained consistent dividend payouts over time. From that list, we chose companies that have increased their dividends by an average of more than 15% annually over the last 3 years. We also mentioned hedge fund sentiment around each stock according to Insider Monkey's database as of Q2 2023. The stocks are ranked in ascending order of their annual average dividend growth in the past three years. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here).

25. Eli Lilly and Company (NYSE:LLY)

3-Year Average Annual Dividend Growth Rate: 15.15%

Eli Lilly and Company (NYSE:LLY) is an American global pharmaceutical company that specializes in the discovery, development, manufacturing, and marketing of a wide range of pharmaceutical products. The company offers a quarterly dividend of $1.30 per share, having raised it by 15% in December 2023. Through this increase, the company achieved its 10th consecutive year of dividend growth. The stock has a dividend yield of 0.81%, as of January 27. With a 3-year average annual dividend growth of 15.15%, LLY is one of the best dividend growth stocks on our list.

At the end of Q3 2023, 102 hedge funds tracked by Insider Monkey reported having stakes in Eli Lilly and Company (NYSE:LLY), growing from 87 in the preceding quarter. The collective value of these stakes is over $9 billion.

24. Visa Inc. (NYSE:V)

3-Year Average Annual Dividend Growth Rate: 15.30%

Visa Inc. (NYSE:V) is next on our list of the best dividend growth stocks as the company has raised its payouts at an annual average rate of 15.30%. In addition to this, the global financial services company has been growing its dividends for 15 straight years. It currently offers a quarterly dividend of $0.52 per share and has a dividend yield of 0.78%, as recorded on January 27.

Of the 910 hedge funds tracked by Insider Monkey at the end of Q3 2023, 167 hedge funds owned stakes in Visa Inc. (NYSE:V), compared with 171 in the preceding quarter. The consolidated value of these stakes is more than $24.4 billion. Among these hedge funds, TCI Fund Management was the company's leading stakeholder in Q3.

23. Elevance Health, Inc. (NYSE:ELV)

3-Year Average Annual Dividend Growth Rate: 15.93%

Elevance Health, Inc. (NYSE:ELV), previously known as Anthem, is an American multinational health insurance company. The company has always remained committed to its shareholder obligation as it returned $346 million to shareholders through dividends during the fourth quarter of 2023. It offers a quarterly dividend of $1.48 per share and has a dividend yield of 1.35%, as of January 27. In the past three years, the company grew its dividends at an annual average rate of 15.93%, which makes ELV one of the best dividend growth stocks on our list.

As of the end of the September quarter of 2023, 83 hedge funds owned stakes in Elevance Health, Inc. (NYSE:ELV), up from 82 in the previous quarter, according to Insider Monkey's database. These stakes are collectively valued at over $5.2 billion.

22. Carlisle Companies Incorporated (NYSE:CSL)

3-Year Average Annual Dividend Growth Rate: 16.00%

Carlisle Companies Incorporated (NYSE:CSL) is a diversified global manufacturing company with a focus on various markets and industries. The company offers a per-share dividend of $0.85 every quarter, growing it by 13% in August 2023. This was the company's 47th consecutive year of dividend growth, which places it as one of the best dividend growth stocks on our list. The stock's dividend yield on January 27 came in at 1.10%.

Insider Monkey's database of Q3 2023 indicated that 37 hedge funds owned stakes in Carlisle Companies Incorporated (NYSE:CSL), compared with 36 in the previous quarter. The total value of these stakes is over $813.5 million. With over 1.6 million shares, Generation Investment Management was the company's leading stakeholder in Q3.

21. United Parcel Service, Inc. (NYSE:UPS)

3-Year Average Annual Dividend Growth Rate: 17.06%

United Parcel Service, Inc. (NYSE:UPS) is one of the world's largest and most recognized shipping and logistics companies. The company maintains a 21-year streak of consistent dividend growth and its annual average dividend growth rate in the past three years comes in at 17.06%. It offers a quarterly dividend of $1.62 per share for a dividend yield of 4.07%, as of January 27.

At the end of September 2023, 42 hedge funds in Insider Monkey's database owned stakes in United Parcel Service, Inc. (NYSE:UPS), worth collectively over $1.8 billion.

20. Innovative Industrial Properties, Inc. (NYSE:IIPR)

3-Year Average Annual Dividend Growth Rate: 17.33%

Innovative Industrial Properties, Inc. (NYSE:IIPR) is an American real estate investment trust company that is focused on the acquisition, ownership, and management of specialized properties in the medical-use cannabis industry. On December 15, the company declared a 1.1% hike in its quarterly dividend to $1.82 per share. This marked the company's seventh consecutive year of dividend growth. In the past 3 three years, the company's dividend growth rate came in at 17.33%, which makes IIPR one of the best dividend growth stocks on our list. As of January 27, the stock has a dividend yield of 7.73%.

According to Insider Monkey's database of Q3 2023, 16 hedge funds owned stakes in Innovative Industrial Properties, Inc. (NYSE:IIPR), which remained unchanged from the previous quarter. The consolidated value of these stakes is roughly $128 million.

19. The Kroger Co. (NYSE:KR)

3-Year Average Annual Dividend Growth Rate: 17.39%

With a 3-year average annual dividend growth rate of 17.39, The Kroger Co. (NYSE:KR) is next on our list of the best dividend growth stocks. The American grocery retailer maintains a 17-year streak of consistent dividend growth and currently pays a quarterly dividend of $0.29 per share. The stock's dividend yield on January 27 came in at 2.51%.

The number of hedge funds tracked by Insider Monkey owning stakes in The Kroger Co. (NYSE:KR) stood at 41 in Q3 2023, compared with 43 in the previous quarter. These stakes have a total value of over $3 billion. With 50 million shares, Berkshire Hathaway was the company's leading stakeholder in Q3.

18. Parker-Hannifin Corporation (NYSE:PH)

3-Year Average Annual Dividend Growth Rate: 17.91%

Parker-Hannifin Corporation (NYSE:PH) is a global industrial company that specializes in motion and control technologies. On January 25, the company announced a quarterly dividend of $1.48 per share, which was in line with its previous dividend. In 2023, it achieved its 66th consecutive year of dividend growth, which makes PH one of the best dividend growth stocks on our list. The stock has a dividend yield of 1.26%, as of January 27.

Parker-Hannifin Corporation (NYSE:PH) saw a huge uptick in hedge fund positions at the end of Q3 2023 with 52 funds tracked by Insider Monkey owning stakes in the company, up from 41 a quarter earlier. The consolidated value of these stakes is more than $1 billion. Among these hedge funds, Harris Associates was the company's leading stakeholder in Q3.

17. The Allstate Corporation (NYSE:ALL)

3-Year Average Annual Dividend Growth Rate: 18.12%

The Allstate Corporation (NYSE:ALL) is an American insurance company that offers a range of insurance services to individuals, families, and businesses. It is one of the best dividend growth stocks on our list as the company holds a 15-year streak of consistent dividend growth. Moreover, the company's annual average dividend growth rate for the past three years comes in at 18.12%. Currently, it pays a quarterly dividend of $0.89 per share and has a dividend yield of 2.25%, as of January 27.

As of the end of Q3 2023, 35 hedge funds tracked by Insider Monkey owned stakes in The Allstate Corporation (NYSE:ALL), down from 41 in the previous quarter. The total value of these stakes is over $815 million.

16. Best Buy Co., Inc. (NYSE:BBY)

3-Year Average Annual Dividend Growth Rate: 18.71%

Best Buy Co., Inc. (NYSE:BBY) is next on our list of the best dividend growth stocks to buy and hold in 2024. The American retailer has grown its dividends at an annual average rate of 18.71% over the past three years. Not only this, the company has also been increasing its dividends for the past 10 consecutive years. It currently pays a quarterly dividend of $0.92 per share and has a dividend yield of 4.92%, as of January 27.

As per Insider Monkey's database of Q3 2023, 28 hedge funds owned stakes in Best Buy Co., Inc. (NYSE:BBY), worth over $311.8 million. With over 1.2 million shares, AQR Capital Management was the company's leading stakeholder in Q3.

15. Nordson Corporation (NASDAQ:NDSN)

3-Year Average Annual Dividend Growth Rate: 19.98%

Nordson Corporation (NASDAQ:NDSN) is a global precision technology company that specializes in providing products and systems for precision dispensing, fluid management, and related technologies. The company's dividend growth streak spans over 60 years, which makes it one of the best dividend growth stocks on our list. It currently pays a quarterly dividend of $0.68 per share and has a dividend yield of 1.08%, as of January 27.

Nordson Corporation (NASDAQ:NDSN) was a part of 21 hedge fund portfolios at the end of Q3 2023, according to Insider Monkey's database. The stakes owned by these hedge funds have a total value of more than $97.2 million.

14. Williams-Sonoma, Inc. (NYSE:WSM)

3-Year Average Annual Dividend Growth Rate: 20.08%

Williams-Sonoma, Inc. (NYSE:WSM) is a specialty retailer that operates several brands offering high-quality products for the home. With an annual average dividend growth of the past three years standing at 20.08%, WSM is one of the best dividend growth stocks on our list. The company has been growing its dividends for 14 consecutive years and it offers a quarterly dividend of $0.90 per share. The stock offers a dividend yield of 1.73%, as of January 27.

At the end of Q3 2023, 31 hedge funds tracked by Insider Monkey owned stakes in Williams-Sonoma, Inc. (NYSE:WSM), down slightly from 33 in the previous quarter. These stakes have a total value of nearly $1 billion. Among these elite funds, Leonard Green & Partners was the largest stakeholder of the company in Q3.

13. American Express Company (NYSE:AXP)

3-Year Average Annual Dividend Growth Rate: 21.61%

With a 3-year average annual dividend growth rate of 21.61%, American Express Company (NYSE:AXP) ranks thirteenth on our list of the best dividend growth stocks to buy. On January 26, the American financial services company declared a 16.7% hike in its quarterly dividend to $0.70 per share. The company has been rewarding shareholders with regular dividends for the past 34 years. As of January 27, the stock has a dividend yield of 1.19%.

As of the close of the September quarter of 2023, 74 hedge funds owned stakes in American Express Company (NYSE:AXP), according to our database. The total value of these stakes is over $25.6 billion.

12. The New York Times Company (NYSE:NYT)

3-Year Average Annual Dividend Growth Rate: 22.23%

The New York Times Company (NYSE:NYT) is a media company with a primary focus on journalism and news reporting. In the past three years, the company raised its dividends at an annual average rate of 22.23% and it holds a 5-year streak of dividend growth. The company offers a quarterly dividend of $0.11 per share and has a dividend yield of 0.89%, as of January 27.

According to Insider Monkey's database of Q3 2023, 33 hedge funds held stakes in The New York Times Company (NYSE:NYT), down from 36 in the preceding quarter. These stakes are collectively valued at over $1.8 billion.

11. Mid-America Apartment Communities, Inc. (NYSE:MAA)

3-Year Average Annual Dividend Growth Rate: 23.13%

Mid-America Apartment Communities, Inc. (NYSE:MAA) ranks eleventh on our list of the best dividend growth stocks with 3-year dividend growth of 23.13% annually on average. The American real estate investment trust company has raised its dividends for 13 years straight and offers a quarterly dividend of $1.47 per share. As of January 27, the stock has a dividend yield of 4.49%.

At the end of Q3 2023, 19 hedge funds in Insider Monkey’s database reported having stakes in Mid-America Apartment Communities, Inc. (NYSE:MAA), worth roughly $200 million in total.

Click to continue reading and see 10 Best Dividend Growth Stocks to Buy and Hold in 2024. 

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Disclosure. None. 25 Best Dividend Growth Stocks to Buy and Hold in 2024  is originally published on Insider Monkey.