Five Dividend Stocks Crushing Inflation With Consistent Dividend Payout Growth
A static dividend yield quietly loses ground every month inflation climbs, but five companies have been raising their payouts fast enough to fight back. The question is which ones have the cash flow to keep doing it.
This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.
The income question in regard to retirement centers on which stock will keep raising its payout faster than prices climb. The Consumer Price Index reads 334.1, with the most recent monthly move up 0.4%. A static yield loses ground against a backdrop like that. A rising payout defends it. Below are five US-listed dividend payers whose latest quarterly hikes comfortably clear a low single digit inflation pace, ranked by the size, consistency, and cash-flow support behind the increase.
5. Lowe’s
Lowe’s (NYSE:LOW | LOW Price Prediction) is the second-largest US home improvement retailer, serving both DIY customers and professional contractors. The board lifted the quarterly dividend from $1.20 to $1.25, with a trailing twelve-month total of $4.85 per share and yield near 2.47%. Quarterly revenue reached $25.96B (+8.34% YoY) with adjusted EPS of $4.40, beating the $4.22 consensus. Operating cash flow of $3.659B in the latest quarter easily covered the $672M dividend outlay. Caveat: shares have fallen 17.13% year to date and 26.27% over the trailing year as the DIY macro remains soft.
4. Texas Instruments
Texas Instruments (NASDAQ:TXN) designs and manufactures analog and embedded semiconductors sold to industrial, automotive, and data-center customers. The quarterly payout stepped up from $1.36 to $1.42, extending a pattern of raising, holding, and raising again. Yield sits near 2.17%. Quarterly revenue jumped to $5.46B (+22.82% YoY), and EPS of $2.14 beat the $1.94 estimate by 10.56%. Trailing free cash flow reached $6.53B, or 33.6% of revenue. Annual dividend payout climbed to $4.999B in the most recent fiscal year. Caveat: TI is deep in a heavy capex cycle, spending $4.55B on capital against $7.153B of operating cash flow, compressing free cash while the 300mm buildout finishes.
3. UnitedHealth Group
UnitedHealth Group (NYSE:UNH) is the country’s largest managed care and health services company, running UnitedHealthcare alongside Optum’s pharmacy benefit, health services, and provider businesses. The board raised the quarterly dividend from $2.21 to $2.32, with an annualized forward payout of $9.28 per share. Quarterly revenue hit $111.72B (+1.96%) with adjusted EPS of $7.23, beating the $6.61 estimate by 9.38%. Full-year adjusted EPS guidance was lifted to $19.50-$20.00, and the repurchase commitment doubled to at least $5.0B. Caveat: Medicare Advantage membership fell by 965K, Optum Health revenue slipped 5%, and a DOJ Medicare investigation remains an overhang.
2. Broadcom
Broadcom (NASDAQ:AVGO) sells custom AI accelerators, networking silicon, and enterprise infrastructure software, including the acquired VMware franchise. The quarterly dividend rose from $0.59 to $0.65, with the annualized forward at $2.60. Yield runs near 0.72%, kept low by an aggressive growth rate. Quarterly revenue reached $29.59B (+85.5% YoY), AI semiconductor revenue reached $16.7B, up 221% YoY, and free cash flow of $13.66B represented 46% of revenue. Annual dividend payout climbed to $11.142B, from $7.645B two fiscal years earlier. Caveat: stock-based compensation of $7.568B in the last fiscal year is meaningful dilution, and shares slipped 3% after earnings.
1. ADP
ADP (NASDAQ:ADP) runs payroll and human capital management software for employers of every size, and earns float income on client money it holds between payroll cycles. The board raised the quarterly dividend from $1.54 to $1.70, the largest step-up on this list in both dollar and percentage terms. Trailing twelve-month payout is $6.80 per share, and yield sits near 2.5%. Full-year revenue reached $21.95B (+6.74%), EPS was $11.12, and operating cash flow of $5.441B covered a $2.626B annual dividend with room to spare. Interest on client funds grew 15% to $355.4M. Caveat: shares are down 6.92% over the trailing year.
Growth Beats Yield
The through-line across these five is straightforward. Each has lifted its payout by an amount that clears a low single digit inflation pace, each generates operating cash flow well above what the dividend requires, and each has a multi-year record of continuing to raise. That last trait is the whole game for income investors, and we ranked ten companies with 50+ year streaks by valuation in a free Dividend Kings report. ADP anchors the group here because the size of its latest step-up, combined with fiscal-year operating cash flow of $5.441B against a dividend outlay of $2.626B, is the cleanest defense a retirement portfolio can hold against slow price erosion.
Contact [email protected] for any questions or corrections.
Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
