5 Strong Buy Passive Income Giants Have Raised Their Dividends by Double Digits for Years

Investors love dividend stocks because they provide dependable passive income streams and an excellent opportunity for solid total return. Total return includes interest, capital gains, dividends, and distributions realized over time. In other words, the total return on an investment or portfolio consists of income and stock appreciation. At 24/7 Wall St., we have focused on dividend stocks for over 15 years because, despite the stock market’s ups and downs, many people need reliable passive income streams to supplement their income from employment or other sources such as Social Security and pensions.

According to the Internal Revenue Service (IRS), passive income generally includes earnings from rental activity or any trade, business, or investment in which the individual does not materially participate. It can also include income from limited partnerships, stocks, bonds, and other similar enterprises in which the investor is not actively involved. The more passive income covers rising costs—such as mortgages, insurance, taxes, and other expenses—the easier it is for investors to set aside money for future needs as they prepare for retirement. Dependable recurring dividends, paid either monthly or quarterly, are a recipe for success.

Quick Read:

• Dividend stocks provide passive income and total returns through capital gains and distributions, making them valuable for supplementing employment income and preparing for retirement.

• The screening identified five companies that are rated Buy by major Wall Street firms and have raised dividends by double digits over the past three years, positioning them to combat inflation through reliable recurring payments.

• The analyst who called NVIDIA in 2010 just named his top 10 stocks and ADP wasn’t one of them. Get them here FREE.

We screened our 24/7 Wall St. dividend stocks database, looking for quality companies that have been raising their payments to shareholders by double-digit percentages over the past three years. In an economy that could still be facing more inflation, owning companies that raise dividends by double digits makes sense in an era of rising prices. All five companies we found are Buy-rated at top Wall Street firms that we cover.

The analyst who called NVIDIA in 2010 just named his top 10 stocks and ADP wasn’t one of them. Get them here FREE.

Why do we cover companies raising dividends by double digits?

Since 1926, dividends have accounted for approximately 32% of the S&P 500’s total return, while capital appreciation has accounted for 68%. Therefore, sustainable dividend income and the potential for capital appreciation are essential to total return expectations. A study by Hartford Funds, in collaboration with Ned Davis Research, found that dividend stocks delivered an annualized return of 9.18% over the 50 years from 1973 to 2023. Over the same timeline, this was more than double the annualized return for non-payers (3.95%).

ADP

This company, founded in 1949, is a global leader in payroll and HR services and provides cloud-based software trusted by over 80% of Fortune 100 companies. Automatic Data Processing (NYSE: ADP) is a global technology company engaged in providing cloud-based human capital management (HCM) solutions that unite HR, payroll, talent, time, tax, and benefits administration.

ADP benefits from its dominant position in payroll and HR services, with highly recurring, subscription-like revenue, and pays a 3.03% dividend, which has increased by a double-digit amount (12.36%) each year, on average, over the past five years. Its segments include:

The Employer Services segment serves clients ranging from single-employee small businesses to large enterprises with tens of thousands of employees worldwide, offering a range of technology-based HCM solutions, including its cloud-based platforms and human resource outsourcing (HRO) solutions (other than PEO).

The company’s offerings include:

• Payroll Services

• Benefits Administration

• Talent Management

• HR Management

• Workforce Management

• Compliance Services

• Insurance Services

• Retirement Services

Its PEO business, called ADP TotalSource, provides clients with employment administration outsourcing solutions. ADP serves over 1.1 million clients across 140 countries and territories.

Cantor Fitzgerald has a Buy rating with a $244 target price.

Broadcom

This technology giant has been on fire. Many investors probably don’t know it has increased its payout by an average of 19.25% annually over the past five years, making it one of the most aggressive dividend growers in tech — despite its small 0.60% dividend yield — as the shares have surged over the past year. Broadcom (NASDAQ: AVGO) is a global technology firm that designs, develops, and supplies a range of semiconductors, enterprise software, and security solutions.

The company operates through two segments. The Semiconductor Solutions segment includes all of its product lines and intellectual property (IP) licensing. Broadcom provides:

• Radio-frequency semiconductor devices

• Wireless connectivity solutions

• Custom touch controllers

• Inductive charging solutions for mobile applications

The Infrastructure Software segment includes:

• Private and hybrid cloud

• Application development and delivery

• Software-defined edge

• Application networking and security

• Mainframe

• Distributed and cybersecurity solutions

• FC SAN business

Broadcom provides a portfolio of software solutions that enable customers to plan, develop, automate, manage, and secure applications across mainframe, distributed, mobile, and cloud platforms.

J.P. Morgan has an Overweight rating and a $500 target price.

NextEra Energy

This top company is among the highest-rated utility stocks on Wall Street, which pays a dependable 2.49% dividend. NextEra Energy (NYSE: NEE) dividend payments per share have grown at an average of 10.05% over the past 36 months (three years) and 10.11% over the past 60 months. The company has recorded 32 consecutive years of dividend increases. The company has made its target explicit: NextEra Energy continues to expect to grow its dividends per share at roughly 10% per year through at least 2026, off a 2024 base.

NextEra Energy is an electric power and energy infrastructure company. It operates through its wholly owned subsidiaries, NextEra Energy Resources and NextEra Energy Transmission (collectively, NEER), and Florida Power & Light Company (FPL). The company is working with Google on developing gigawatt-scale data center campuses and will develop 2.5 GW of solar projects for Meta. NextEra also agreed to a 25-year deal with Alphabet to acquire 3 gigawatts of energy from a redeveloped nuclear facility.

The FPL segment is a rate-regulated electric utility that generates, transmits, distributes, and sells electric energy in Florida. FPL has approximately 35,052 megawatts of net generating capacity, over 91,000 circuit miles of transmission and distribution lines, and 921 substations.

The NEER segment owns, develops, constructs, manages, and operates electric generation facilities in wholesale energy markets in the United States and Canada and includes assets and investments in other businesses with a clean energy focus, such as battery storage, natural gas pipelines, and renewable fuels. It owns, develops, constructs, and operates rate-regulated transmission facilities in North America.

HSBC has a Buy rating and a price target of $106.

Parker-Hannifin

This top company’s payouts have increased by an average of 14.26% annually over the past five years. With 67 years of consecutive dividend growth, Parker-Hannifin (NYSE: PH) has long since passed the Dividend King threshold of 50 years and specializes in motion and control technologies, with a current dividend yield of 0.81%.

The company designs, manufactures, and provides aftermarket support for highly engineered solutions. Its segments include:

• Diversified Industrial

• Aerospace Systems

Diversified Industrial segment, an aggregation of several business units, sells highly engineered, differentiated products to both original equipment manufacturers (OEMs) and distributors serving aftermarket replacement markets. This segment serves various markets, including:

The Aerospace Systems Segment sells highly engineered, differentiated airframe and engine components and systems to OEMs and aftermarket parts and maintenance directly to end users primarily in the commercial aerospace and defense market verticals. Its products include fuel systems and components, avionics, flight control systems, and others.

Citigroup has a Buy rating with a $1,141 target price.

SBA Communications

This cell phone tower REIT was one of five new additions to Morningstar’s list of companies with five or more consecutive years of double-digit dividend increases, putting it among a very select group of consistent double-digit dividend growers. SBA Communications (NASDAQ: SBAC) is an independent owner and operator of wireless communications infrastructure, including towers, buildings, rooftops, distributed antenna systems, and small cells, and it currently pays a 2.09% dividend.

Its primary focus is the leasing of antenna space on its multi-tenant towers to a variety of wireless service providers under long-term lease contracts in the United States, South America, Central America, Canada, and Africa. Its segments include:

The Domestic Site Leasing segment leases to T-Mobile, AT&T Wireless, and Verizon Wireless. It owns over 17,464 sites in the United States and its territories. The International Site Leasing segment owns and operates over 22,285 towers in 13 international markets throughout South America, Central America, Canada, and Africa. Site development services include network pre-design, site audits, tower and related site construction, support for leasing the location, and more.

Truist Financial has a Buy rating with a $248 price objective.

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