10 Best S&P 500 Stocks to Buy For Dividend Growth

7. Costco Wholesale Corporation (NASDAQ:COST)

5-Year Average Dividend Growth Rate: 12.28%

Costco Wholesale Corporation (NASDAQ:COST) ranks seventh on our list of the best dividend stocks for dividend growth. The American retail company’s business model has proven resilient against inflationary pressures since going public in 1985, and it is expected to continue outperforming many of its industry rivals. The company’s ability to keep product prices low stems from its reliance on high-margin membership fees as its primary source of profit. In September 2024, it implemented its first membership fee increase in seven years. The stock has surged by over 27% since the start of 2025.

In fiscal Q1 2025, Costco Wholesale Corporation (NASDAQ:COST) reported revenue of $62 billion, marking a 7.5% increase year over year. Net income rose to $1.8 billion from $1.6 billion in the same period last year. The company maintained a strong liquidity position, closing the quarter with nearly $11 billion in cash and equivalents, up from $9.9 billion in the prior quarter. In addition, it generated $3.3 billion in operating cash flow.

Analysts remain optimistic about Costco Wholesale Corporation (NASDAQ:COST)’s prospects, citing its ability to gain market share and leverage its retail-as-a-service model, which ensures a steady stream of membership income. The company’s competitive edge lies in its bulk-discount pricing and membership-driven approach, which has fostered a loyal and expanding customer base, as reflected in its latest quarterly results.

Costco Wholesale Corporation (NASDAQ:COST) currently pays a quarterly dividend of $1.16 per share and has a dividend yield of 0.50%, as recorded on March 26. The company maintains a 20-year streak of dividend growth, and its 5-year average annual dividend growth stands at over 12%.