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Dear Fellow Investor,
3 Dividend Kings That Just Raised Dividends (And Why They Matter)
The right dividend stocks can provide a lifetime of income. They don't just reward you with steady cash flow today—they can also increase your future payouts over time, creating a compounding effect that's difficult to replicate with most other asset classes.
That is why dividend growth matters at least as much as dividend yield.
A high yield can be tempting, but if it is unsupported by earnings power and free cash flow, it can be cut—often at the worst possible moment, when the stock price is already under pressure. By contrast, companies that reliably raise dividends year after year tend to have a disciplined capital allocation culture, resilient cash generation, and management teams that understand the importance of shareholder trust.
One of the strongest quality signals in the income world is a long track record of dividend increases—especially through multiple recessions, inflation cycles, and industry disruptions. This week, we are highlighting three Dividend Kings: dividend growth stocks that have delivered at least 50 consecutive years of annual dividend increases. That kind of history does not happen by accident.
Dividend Kings are not guaranteed to outperform in every market environment, and they are not risk-free. But as a group, they are often prime candidates for long-term investors seeking dependable income growth—particularly those building retirement cash flow, funding charitable goals, or simply wanting a portfolio anchored by durable businesses.
Below are three Dividend Kings that raised dividends recently, along with what makes each one attractive, what to watch, and how each might fit within an income-focused portfolio.
Company: Hormel Foods Corporation (SYM: HRL)
Recent Price: $24.00
Consecutive Years of Annual Dividend Increases: 58
10-Year Annualized Dividend Growth: 10.94%
Forward Dividend & Yield: $1.17 (4.84%)
Dividend Frequency: Quarterly
Hormel is a classic example of a dividend grower built on essential consumer demand. The company develops, processes, and distributes a wide range of food products across three operating segments: Retail, Foodservice, and International. In practical terms, Hormel participates in categories that consumers buy in good times and bad—items like refrigerated meal solutions, bacon, sausages, deli meats, and a deep lineup of shelf-stable products.
From an income investor's perspective, Hormel's appeal comes from two angles:
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Defensive demand profile. Food consumption is not discretionary in the way travel, luxury goods, or durable items can be. Demand can shift between brands and price points, but the category itself tends to remain resilient.
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Dividend culture. Fifty-eight consecutive years of increases is a statement. It implies the company has navigated inflation, commodity volatility, and changing consumer preferences while still returning more cash to shareholders each year.
What to watch going forward
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Input costs and margins: Food companies can face volatility in commodities, freight, and labor. Durable dividends are supported by a company's ability to protect margins through pricing, mix, and operating efficiency.
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Consumer trade-down behavior: In tighter economic periods, shoppers may shift to lower-cost alternatives. The best consumer staples companies manage through this with strong brands and smart product positioning.
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Balance between yield and growth: HRL's yield (based on the figures above) is attractive, but the key is whether earnings and cash flow keep pace.
Portfolio role: HRL can serve as a more defensive dividend-growth holding—particularly for investors who want income with a consumer staples tilt.
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Company: Automatic Data Processing, Inc. (SYM: ADP)
Recent Price: $259.48
Consecutive Years of Annual Dividend Increases: 50
10-Year Annualized Dividend Growth: 12.76%
Forward Dividend & Yield: $6.80 (2.62%)
Dividend Frequency: Quarterly
ADP operates in a very different domain than Hormel, but it shares the same core attribute: durability.
ADP provides cloud-based human capital management solutions globally, with offerings spanning payroll, HR management, workforce administration, compliance, and data analytics. It operates through Employer Services and its Professional Employer Organization (PEO) segment, which provides HR outsourcing through a co-employment model.
Why does ADP stand out for dividend growth investors?
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Recurring, mission-critical services. Payroll and HR administration are not optional for businesses. Even when hiring slows, companies still run payroll, maintain benefits, and stay compliant. That recurring nature can support steadier cash generation.
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Strong dividend growth profile. A 10-year annualized dividend growth rate of 12.76% is meaningful. Even with a moderate yield, consistent high-single to low-double-digit dividend growth can significantly increase income over time.
What to watch going forward
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Employment trends: ADP's volumes are tied, in part, to employment levels and business formation. A slower labor market can temper near-term growth, though ADP's stickiness often helps.
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Competitive dynamics and product innovation: The HR software landscape is competitive. ADP's ability to modernize platforms and keep customer satisfaction high is central to long-term strength.
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Operating leverage: Investors should track whether revenue growth translates into expanding margins and free cash flow—fuel for future dividend increases.
Portfolio role: ADP fits well as a "quality compounder" in an income-growth portfolio: modest yield, strong history, and a business model supported by recurring enterprise demand.
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Company: PepsiCo, Inc. (SYM: PEP)
Recent Price: $144.07
Consecutive Years of Annual Dividend Increases: 53
10-Year Annualized Dividend Growth: 7.92%
Forward Dividend & Yield: $5.69 (3.94%)
Dividend Frequency: Quarterly
PepsiCo is a global consumer staples leader with a diversified footprint across beverages and convenient foods. It operates across multiple geographic segments and owns a portfolio of household brands spanning snacks, sports drinks, sodas, water, and packaged foods.
PepsiCo's dividend strength is rooted in:
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Scale and distribution. PepsiCo's global distribution network and brand portfolio provide meaningful shelf presence and pricing power over long periods—critical for maintaining dividends through inflationary environments.
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Balanced dividend profile. With a yield that is typically more notable than many "growthy" dividend names, PepsiCo can appeal to investors who want current income and steady dividend increases.
What to watch going forward
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Pricing versus volume: In consumer staples, price increases can support revenue, but sustained volume declines can become an issue. The healthiest profile is disciplined pricing with stable or improving volumes over time.
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Input cost management: Packaging, commodities, and transportation costs can move quickly. Strong operators protect margins through scale and efficiency.
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Category shifts: Consumer preferences evolve. PepsiCo's innovation and portfolio management will influence its ability to sustain growth.
Portfolio role: PEP can act as a core dividend holding—an anchor position for investors who want income backed by global brands and steady cash flow.
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