I have invested in dividends for 10 years— These are my all-time favorite dividend stocks

Dividend growth stocks, issued by companies with a history of consistently increasing payouts, offer investors a powerful strategy for accumulating wealth over time. These stocks combine reliable income with capital appreciation. 

In 2025’s volatile market, with its tariff uncertainties causing economic uncertainty, dividend growth stocks provide stability, as their rising payouts counter purchasing power erosion. Reinvested dividends compound returns, by historically accounting for as much as 85% of stock’s total returns over decades. 

Unlike high-yield traps, these stocks prioritize quality, with strong balance sheets and sustainable payout ratios. Low volatility and diversification across sectors also reduce your risk. For patient investors, dividend growth stocks deliver steady cash flow and 8% to 10% annualized returns, making them the cornerstone of long-term wealth creation.

I’ve been a dividend growth investor for a decade now, and the following three stocks are among my favorites.

Altria (MO)

Tobacco giant Altria (NYSE:MO) stands out as an exceptional dividend growth stock for investors seeking reliable income and long-term wealth. With a current dividend yield of 7.4% at around $56  per share, Altria has increased its dividend for 55 consecutive years, earning Dividend King status. 

Its first-quarter earnings report showed a 6% increase in adjusted earnings of $1.23 per share, supporting a 74.5% free cash flow payout ratio. Because the cigarette maker is a mature business in an industry experiencing a secular decline, management has targeted returning 80% of earnings to shareholders, making the payout ratio sustainable. 

Altria’s dominance in the U.S. tobacco market, led by Marlboro’s 59% share of the U.S. premium cigarette market, ensures steady cash flows despite declining cigarette volumes, with smoke-free products diversifying its revenue stream. 

Analyst sentiment remains positive, with numerous firms raising their price target on MO stock just ahead of earnings last month. Altria’s strong fundamentals, high yield, and consistent dividend growth make it a top choice for income-focused investors building wealth over time.

Domino’s (DPZ)

My second favorite dividend growth stock is Domino’s (NYSE:DPZ). At around $484 per share, Domino’s offers a 1.3% yield, with its $1.74 quarterly dividend raised 15% in 2025, marking 13 years of consecutive increases. 

What makes the world’s largest pizza chain remarkable is its 20% compound growth rate in the payout for at least the past 10 years. DPZ’s yield may be modest, in line with the S&P 500 as a whole, but the rapid rise in dividends quickly lowers an investor’s yield on cost. What was once a $0.80 per share payout in 2013 now stands at $6.96 per share today.

First-quarter earnings reported a 21% increase in earnings per share, driven by higher net income and buying back shares. Outstanding shares have fallen from around 56 million to 34.5 million over the past decade, demonstrating DPZ’s commitment to returning value to investors through dividends and share purchases. The FCF payout ratio is a very sustainable 31%. 

Domino’s digital innovations, like its 60% online order share and loyalty program, bolster margins, while its franchise model generates consistent cash flows. 

Despite competition from Pizza Hut and independent pizzerias, Domino’s 23% U.S. market share, global footprint, and robust fundamentals make it a compelling choice for income and growth-focused investors.

Schwab U.S. Dividend Equity ETF (SCHD)

My third favorite dividend stock is an exchange-traded fund (ETF), the Schwab U.S. Dividend Equity ETF (NYSEARCA:SCHD). At around $26 per share, SCHD offers a 3.98% yield, with dividends growing 11.8% annually over 10 years. Tracking the Dow Jones U.S. Dividend 100 Index, SCHD holds 103 high-quality firms like Coca-Cola (NYSE:KO) and Altria. 

The ETF has $68.3 billion in assets under management and diversified exposure across sectors. Approximately 21% of its portfolio is in energy stocks, 19% in consumer staples, and nearly 16% in healthcare, providing stability and lower risk of volatility. 

Since its inception in 2011, SCHD generated 12.9% annualized returns. Despite interest rate sensitivity, the ETF’s focus on companies with 10 years or more of dividend hikes ensures resilience. For income-focused investors, SCHD’s high yield, low costs, and consistent growth make it an ideal cornerstone for wealth accumulation.

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