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

3. Lowe’s Companies, Inc. (NYSE:LOW)

5-Year Average Dividend Growth Rate: 16.39%

Lowe’s Companies, Inc. (NYSE:LOW) ranks third on our list of the best dividend stocks for dividend growth. The North Carolina-based home improvement company operates more than 1,700 locations across the United States. Through its Total Home strategy, the company seeks to meet a wide range of customer needs by providing extensive services tailored to both DIY shoppers and professional contractors.

In recent efforts to strengthen its market position, Lowe’s Companies, Inc. (NYSE:LOW) has focused on several strategic priorities. These include expanding its digital footprint, optimizing supply chain efficiency, and enhancing customer engagement through technological improvements. By emphasizing an omnichannel approach that blends online and in-store experiences, the company aims to maintain profitability while offering a seamless shopping experience.

In the fourth quarter of 2024, Lowe’s Companies, Inc. (NYSE:LOW) reported revenue of $18.55 billion, marking a slight year-over-year decline of 0.2%. Comparable sales edged up by 0.2%, driven by strong performance in the Pro and online segments, a successful holiday season, and rebuilding efforts following hurricane damage. However, discretionary spending pressures in the DIY segment partially offset these gains.

Lowe’s Companies, Inc. (NYSE:LOW) maintained a strong cash position, closing the quarter with nearly $1.8 billion in cash and equivalents—an increase from $921 million the previous year. For FY24, the operating cash flow rose to $9.7 billion, up from $8.1 billion a year earlier. Throughout the year, Lowe’s returned $6.5 billion to shareholders through dividends and share buybacks. The company has consistently increased its dividend payouts for 59 consecutive years. Currently, it offers a quarterly dividend of $1.15 per share and has a dividend yield of 1.98%, as of March 26.