Investments that generate consistent income are great. Who doesn’t want their money to work for them? All you have to do is buy the stock and hold it forever. 

But, there's the question of how good the “forever stock” is. Can they sustain their yields? Are they stagnant, or do they increase over time? 

Investing in Dividend Aristocrats - companies with 25+ years of consistently increasing dividends - answers the second question. The first question - well, there are several ways to get an idea if the company can continue to increase dividends. I'll show them to you today and uncover three of the top Aristocrats who have what it takes to continue its dividend increase streak. 

How I Came Up With The Following Dividend Aristocrats With Incredibly High Earnings Growth

Using Barchart’s Stock Screener, I used the following filters to get my list: 

• Dividend Payout Ratio: 60% and below. This is the portion of a company’s profit that it uses to pay dividends. Anything above 60% may indicate that the company is spending too much on distributions and not enough on its capital investments, which can hinder growth. 
• Number of Analysts & Analyst Ratings: 12 and above, and 3.5 (Moderate Buy) to 5 (Strong Buy). More analyst coverage on buy-rated stocks means there’s a better chance of positive growth in the next 12 months. 
• Net Income Growth Last Year: 1% or more. This limits the results to Aristocrats with positive net income growth based on their last annual reports. 

With these filters in place, I ran the screen and got 22 results:

As they say, “revenue talks and cashflow walks.” On that note, while I initially thought about sorting the list by dividend payout ratio, sorting by net income growth (highest to lowest) is a better metric because when net income grows, so can the dividend!

So let’s kick off this list with number one: 

Cardinal Health (CAH)

Cardinal Health is a healthcare services and products company and is one of the nation's largest pharmaceutical distributors. It also sells medical and surgical products, as well as manufactures and distributes diagnostic tools and laboratory products. 

At the end of its 2024 fiscal year, Cardinal Health reported its bottom line growing by a massive 226.44%. Meanwhile, it maintains one of the lowest dividend payout ratios at 18.81%. By these metrics alone, we can say the company appears to be in excellent shape to continue paying and increasing its dividends. 

Speaking of which, Cardinal Health recently increased its quarterly dividend to 51.07 cents per share, translating to around $2.04 per year and around a 1.3% yield based on its current trading price. So, it’s no surprise that analysts rate it a strong buy with an average score of 4.57. 

Dover Corp (DOV)

Dover Corporation is a global manufacturer of a diverse range of equipment primarily used in various industries. Its key segments include engineered products for specialty needs, clean energy and fueling equipment, imaging and identification products, pumps and process solutions, and climate and sustainability technologies. 

Dover’s net income grew by 155.21% in 2024 and has a relatively low 22.95% dividend payout ratio, which means investors sleep well at night knowing their dividend payments are safe and the company has plenty of headroom for growth. Dover pays $2.06 annually - translating to an approximate 1.1% yield - though that’s based on its latest payout. For those interested, the company historically increases its dividends in Q3, so expect a hike in its next announcement. 

However, note that DOV is the only moderate buy-rated stock on this list. 

Abbott Laboratories (ABT)

Last but not least is Abbott Laboratories, one of the most popular Dividend Aristocrats and a frequent stock that comes up on many of my screens. Abbott is a global healthcare company that develops a wide range of medical devices, diagnostics, branded generic medicines, and nutritional products. It services healthcare subsectors such as cardiovascular health, diabetes management, diagnostics, and pediatric and adult nutrition.

After a dismal 2023, Abbott made a strong recovery in 2024, with net income increasing 134.18% year over year. It also has the highest dividend payout ratio on this list: 46.38% - which is reflected in its impressive 71.88% 5-year dividend growth, also the highest on this list. 

Abbott pays 59 cents quarterly, translating to a $2.36 annual rate and around a 1.8% yield. Analysts rate ABT stock as a strong buy. 

Final Thoughts

Dividend investing is more than just finding the company with the highest yield. For long-term investors, steady dividend growth supported by good financial performance is a key consideration. It helps to avoid investments that devolve into dwindling dividends and capital in your supposed retirement portfolios. 

Still, anything can change in the market, and companies don’t always stay at the top of their fields. So, don’t neglect your due diligence before investing. 

On the date of publication, Rick Orford did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.