3 Stellar Dividend Stocks to Survive the Next Big Downturn

Dividend growth investing is a smart way to grow your money over time, especially if you want steady income and long-term wealth. It’s all about picking companies that don’t just pay dividends, but increase them regularly, often for years or decades. This creates a snowball effect: your dividend checks get bigger each year, and if […] The post 3 Stellar Dividend Stocks to Survive the Next Big Downturn appeared first on 24/7 Wall St..

Feb 27, 2025 - 22:11

3 Stellar Dividend Stocks to Survive the Next Big Downturn

Dividend growth investing is a smart way to grow your money over time, especially if you want steady income and long-term wealth.

It’s all about picking companies that don’t just pay dividends, but increase them regularly, often for years or decades. This creates a snowball effect: your dividend checks get bigger each year, and if you reinvest them (which you should do), your shares grow, too. It’s like planting a tree that keeps bearing more fruit.

Over decades, a 10% dividend growth rate can double your income every seven years, beating inflation, and building a reliable retirement nest egg. It’s less risky than chasing high-yield stocks that might cut payouts, focusing instead on companies with strong cash flow and growth potential.

24/7 Wall St. Insights:

Dividend stocks have a 100-year track record of outperforming not only other asset classes, but also all other stocks.
Buying stocks that pay dividend and then regularly raise them, gives investors the best chance to grow a comfortable retirement nest egg.
The three dividend growth stocks below have all raised their dividend by at least 10% every year for the last 10 years.
If you’re looking for some stocks with huge potential, make sure to grab a free copy of our brand-new “The Next NVIDIA” report. It features a software stock we’re confident has 10X potential.

Lowe’s (LOW)

Lowe's store — The home improvement retailer has an impressive 59-year record of raising its payout

Lowe’s (NYSE:LOW) is the second-largest home improvement retailer, with over 1,700 stores across the U.S. and Canada, selling everything from lumber to appliances. It also happens to be a Dividend King, having raised its dividend for 59 straight years, with a 10-year compound annual growth rate (CAGR) of about 18.7%. That means if you’d invested $10,000 ten years ago, your annual dividend could be over $1,900 today, growing steadily.

Lowe’s is a primary beneficiary of the robust U.S. housing market. People are always fixing up homes, especially with the low-interest rates environment we recently went through boosting construction.

Its cash flows are also rock-solid, with $11.3 billion in operating cash flow in 2024, supporting a 1.8% yield and room for hikes. But watch out for risks like economic slowdowns, rising rates, or competition from Home Depot (NYSE:HD), which could hit sales. Still, its brand and steady growth make it a solid pick for dividend growth.

Broadcom (AVGO)

3D illustration of glowing blue "AI" text on a computer chip, dark background with circuit board texture. — Broadcom’s focus on AI has accelerated its growth and allows it to pay a dividend that it has raised at an incredible 33% annually for 10 years

Broadcom (NASDAQ:AVGO) is a tech powerhouse making chips and software for everything from smartphones to AI data centers. The latter has become a major growth driver for the chipmaker.

Its 10-year dividend CAGR is an astounding 33%, one of the fastest in tech. It paid its first dividend in 2010 and has consistently grown the payout every year afterward. It raised the dividend 14% in 2024. If you’d invested $10,000 ten years ago, your dividend could now be over $4,000 yearly, thanks to its 1.1% yield and explosive growth.

Broadcom’s riding the AI wave, with chips like the Jericho3-AI driving $14.1 billion in fourth-quarter revenue, a 51% surge year-over-year. Its market cap sits just below $1 trillion and $17.6 billion free cash flow in 2024 shows it can keep boosting payouts. But risks loom. It carries a high forward P/E ratio of 27, tech demand, especially for AI products could be slowing down, and Trump’s tariffs on semiconductors could pressure profits. Still, its innovation and scale make it a dividend growth gem if AI keeps booming.

Mastercard (MA)

Mastercard is a payments giant whose growth has been juiced by increases in global payment volumes

Global payments giant Mastercard (NYSE:MA) processes trillions in transactions yearly, from credit cards to digital wallets. It’s increased its dividend for over 10 years, with a 10-year CAGR of 20%. Investing $10,000 into MA stock a decade ago could now yield over $2,200 annually, with a 0.5% yield and room for growth.

Mastercard’s transaction volume grew 10% in 2024, fueled by e-commerce and global spending, with $26.8 billion in revenue and $11.2 billion in free cash flow. Its network is rock-solid, benefiting from cashless trends and emerging markets. But watch for risks like rising interest rates, U.S. antitrust probes, and competition from Visa (NYSE:V), which could slow growth if consumer spending dips or regulations tighten. Still, its steady cash flow and global reach make it a strong dividend growth choice.

Key takeaway

These three stocks offer reliable dividend growth, but investors can’t ignore the economic and sector risks they face.

Which is why buying dividend growth stocks remains a key investment strategy. It softens the blow of any downturn, provides a steady stream of income, and can build wealth long-term when you invest in quality business.

It’s not foolproof, but it gives investors a real edge in creating generational wealth.

The post 3 Stellar Dividend Stocks to Survive the Next Big Downturn appeared first on 24/7 Wall St..