Dividend Aristocrats are the crème de la crème for income investors. There are currently 69 companies that have increased their dividend payouts for more than 25 consecutive years. These companies are highly regarded since the regular dividend hikes allow shareholders to either reliably compound their investments or get an income stream that only keeps increasing.
There are dividend stocks that almost qualify for that label but are a year or two away from doing so. Not only does this make it unlikely for management to reduce dividend payouts, but it can also give you good upside potential. Exchange-traded funds regularly include dividend aristocrats, and many investors screen stocks with the requirement that a stock has a 25-year-plus record of hiking dividends. This makes it more likely that the following dividend stocks could see increased inflow.
Lockheed Martin (LMT)
Lockheed Martin (NYSE:LMT | LMT Price Prediction) has seen better days. The stock is down 12.7% year-to-date due to earlier fears of reduced defense spending and the loss of a classified aeronautics program. However, this is a well-established defense company that should bounce back just fine over the coming years. Tailwinds are only getting stronger from here, and there are signs that the market may have overreacted.
The Trump administration has aggressively pushed for global defense spending increases, so further defense cuts are unlikely. Moreover, the conflict in Eastern Europe seems far from ending, with Middle East conflicts potentially escalating again due to a lack of a formal deal pertaining to enrichment. The F-35 proved itself during the latest round of fighting, so it’ll only be more in demand.
In Q2 2025, sales reached $18.2 billion, up slightly from the year-ago quarter, with full-year expected sales at ~$74 billion. Net earnings for the quarter were $342 million, or $1.46 per share. This is despite a $1.6 billion one-time loss due to the aforementioned program losses.
Still, Lockheed Martin sees free cash flow of $6.6-6.8 billion. Trailing twelve-month operating margin declined to 8.29% but should rebound long-term. It has a massive backlog of $166.5 billion, and inevitable defense spending increases should push up the stock. It has increased its dividends for 23 years consecutively and comes with a 3.14% yield.
Southern Co. (SO)
Southern Co. (NYSE:SO) is a U.S. utility provider that serves over 9 million customers across the Southeast and Beyond. The company’s operations include distributing electricity and natural gas. Both are being supported by long-term tailwinds, hence SO stock is up 16.5% year-to-date.
The Southeast is Southern Co.’s core region, and it is seeing an increase in electricity demand due to AI-related data center build-outs. Retail electricity sales rose 3% in Q2, with the commercial sector leading. The company forecasts over 9.4 GW of new demand in the next decade.
To meet the demand, Southern is extending the life of three coal plants (Plants Bowen, Scherer, and Daniel are 8.2 GW in total) beyond original retirement dates and co-firing with natural gas.
On top of that AI demand, the U.S. is turning into an export powerhouse for Europe post-2022. European countries are shifting their energy sources from Russia to North America and parts of the Middle East. Right now, North America is the safest source due to shipping in the Red Sea being threatened. The U.S. became the EU’s top LNG supplier and shipped 44% of its needs in 2024, with record exports driven by cold winters and diversification. U.S. LNG capacity could double by 2030. Southern’s natural gas segment (Southern Company Gas) saw Q2 revenues up 17.8% to $979 million since it operates in export-heavy states.
As such, the future seems solid here. SO stock has increased its dividends for 24 consecutive years. It yields 3.1%.
W. R. Berkley (WRB)
W. R. Berkley (NYSE:WRB) is an insurance holding company. It operates primarily in the property and casualty insurance sector. The company is known for its decentralized model. WR stock has been one of the most solid holdings over the past two decades. It has consistently outperformed the market and done so in a stable manner.
The compounding is truly impressive when you zoom out. The dividend yield may not be that attractive at 0.52%, but the stock itself is what makes it a great buy for the long run.
In Q2 2025, net premiums written increased to $3.4 billion, vs. $3.1 billion in the year-ago quarter. Net income increased 8.7% to $401 million. The insurance industry remains sound and resilient, with steady demand for property and casualty coverage. WRB is well-positioned to thrive.
It has increased its dividends for 24 consecutive years.
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