3 Best Dividend Growth Stocks in July 2024

Dividend growth stocks offer investors the opportunity to build their wealth slowly but surely.

Betting on stocks with a strong track record of growing payouts has proven to be a proven path to long-term financial comfort. While high-yielding dividend stocks can be tempting, investors should focus on dividend growth. Companies that consistently increase their dividends typically boast robust fundamentals characterized by excellent top- and bottom-line growth. Furthermore, growing dividends provide an effective shield against inflationary headwinds, while investors can enjoy compounding returns.

Without further ado, let’s take a look at these three dividend growth stocks that have an incredible track record of growing their dividend payments. Each of these stocks has been paying dividends for over a decade and has consistently increased them for the past eight years. As a result, there’s a lot to love about these dividend growth stocks, which offer an excellent path to sustainable wealth creation.

Dividend Growth Stocks to Buy: Archer-Daniels-Midland (ADM)

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Archer-Daniels-Midland’s (NYSE: ADM) bull case is a no-brainer.

It is the world’s largest agricultural processor and supplier of food ingredients. Given its positioning and recession-proof business, it has consistently delivered excellent operating results. The steady demand for its products has also made ADM one of the most attractive dividend stocks in its niche.

It yields an excellent 3%, with a payout that has been increasing for the past 30 years. Overall, it has consistently paid dividends for the past 48 years, which speaks to the robust health of its underlying business. Furthermore, given its massive free cash flow base of over $4.7 billion, its dividend profile will continue to go from strength to strength.

Furthermore, ADM stock has underperformed over the past year, losing more than 17% in value. It trades at an attractive 0.36 times forward sales, 71% below the industry median. As such, it’s an excellent time to buy the stock for a steal.

UnitedHealth Group (UNH)

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UnitedHealth Group (NYSE:UN) offers the best of both worlds as a dividend growth stock. In addition to increasing dividend payouts, it has been an excellent capital compounder, with UNH stock growing 115% over the past five years. As such, investing in UNH stock offers a robust combination of price appreciation with a healthy dividend income.

Like ADM, UNH also has a recession-proof business model that ensures stable demand. Healthcare is crucial; doctor visits, prescriptions, and emergency rooms are nearly impossible to avoid. As such, the insurer will always be in demand, as evidenced by its rock-solid top- and bottom-line performance. Revenue and EBITDA growth have averaged a remarkable 10.4% and 13.7% over the past five years.

More importantly, UNH yields an impressive 1.47% to its investors, and has grown its payouts for the past 14 consecutive years. Its 5-year dividend growth rate also stands at an attractive 15.41%.

Dick’s Sporting Goods (DKS)

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Dick’s Sporting Goods (NYSE:DKS) is one of the top players in the athleisure sector, outperforming its competitors year after year. Despite the slowdown in discretionary spending, the business has remained remarkably stable. As a result, DKS stock has risen above 40% this year and continues to deliver strong operating results.

Furthermore, the stellar results have a lot to do with its effective omni-channel strategy, which drives growth through online and physical outlets. Dick’s most recent Q1 earnings report showed that it beat expectations by a wide margin, with earnings per share rising from $2.95 to $3.30, while revenue rose to $3.02 billion, up 6% year-over-year.

Additionally, the company recently increased its dividend by 10% earlier this year, bringing the quarterly payout to $1.10 per share. This marks the 9th consecutive year of payout expansion for the company, with dividend growth of 33.54% over the past five years. As such, DICK’s Sporting Goods emerges as an attractive choice for investors seeking solid performance and steady growth in the retail sector.

On the date of publication, Muslim Farooque had no (direct or indirect) positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to InvestorPlace.com Publication Guidelines