In this article, we will take a look at some of the best Dividend Champions to buy.
Companies known as Dividend Aristocrats belong to the S&P Index and have raised their dividend payments every year for a minimum of 25 years. On the other hand, Dividend Champions have also maintained at least 25 straight years of dividend growth, though they may not be part of the broader market.
It is possible to pursue a strategy that offers both income and growth. Companies that regularly increase their dividends—often referred to as dividend growers—are typically financially sound, well-managed, and of high quality. Over the long term, these businesses not only show lower levels of volatility but also tend to deliver better performance than the broader market, such as the S&P Equal Weight Index. According to a report by Guggenheim, companies that grew and initiated their dividends between May 2005 and December 2024 delivered an annual average return of 10.5%, compared with a 5.5% return of those companies that cut or eliminated their payouts during this period. The broader market produced a 10.4% return on an annual average basis, slightly underperforming the dividend growers.
The report also mentioned that dividend growth strategies have generally shown strong performance in both rising and falling markets. For investors, this offers a chance to benefit from long-term market gains while also helping to preserve more value during inevitable market downturns.
Dividend-paying stocks provided investors with a degree of stability during the volatile month of March, according to Bank of America, which highlighted several standout names during the market’s rough patch. The firm noted that value and dividend-focused stocks performed well that month, as concerns over President Donald Trump’s tariff policies unsettled the broader market. The firm’s quant strategist, Nigel Tupper, said the following in an April 11 report.
“In March, as global equities fell -4.1% on concerns tariffs could increase and slow growth, the best performing global styles were Value and Dividends,”
With investor demand for dividend stocks on the rise, many companies have been steadily increasing their payouts. A report from Janus Henderson revealed that global dividend payments reached an all-time high of $1.75 trillion in 2024, reflecting a 6.6% increase on an underlying basis. The overall headline growth was 5.2%, influenced by fewer one-off special dividends and a stronger US dollar. Out of 49 countries in the index, 17— including major contributors like the US, Canada, France, Japan, and China—set new records for dividend payments. Overall, 88% of companies worldwide either raised their dividends or maintained them throughout the year. Looking ahead, Janus Henderson forecasts that global dividends will rise by 5.0% on a headline basis in the coming year, reaching a new record of $1.83 trillion. Although the stronger US dollar is expected to weigh on headline growth, the underlying growth rate is projected to come in slightly higher, around 5.1%.
Although many companies in the Dividend Aristocrats Index are widely recognized, there are a few Dividend Champions that remain relatively unnoticed due to their lower profile. Given this, we will take a look at some of the best under-the-radar dividend aristocrat stocks.
Photo by Sharon McCutcheon on Unsplash
Our Methodology:
For this article, we scanned a list of Dividend Champions, which are companies that have raised their payouts for 25 consecutive years or more. From that list, we picked some lesser-known companies with sound financials and strong balance sheets and ranked them according to hedge funds having stakes in them, as per Insider Monkey’s database of Q4 2024.
At Insider Monkey, we are obsessed with hedge funds. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
15. Tompkins Financial Corporation (NYSE:TMP)
Number of Hedge Fund Holders: 9
Tompkins Financial Corporation (NYSE:TMP) is an Ithaca-based diversified financial services company that provides a wide range of services in community banking, insurance, and wealth management. The stock has generated strong returns in the past year, surging by over 31%.
In the fourth quarter of 2024, Tompkins Financial Corporation (NYSE:TMP) reported revenue of $77.1 million, which showed an 8.3% growth from the same period last year. The revenue also surpassed analysts’ estimates by $2.36 million. The company attributed its improved performance to higher revenue and a reduction in operating expenses. Revenue growth was broad-based, supported by strong gains in loans, deposits, and fee-based business activities. In the fourth quarter, the firm reported annualized loan growth of 9.4%, a 14-basis-point increase in net interest margin, and stronger profitability indicators to close out the year.
Tompkins Financial Corporation (NYSE:TMP) also reported a strong cash position. The company ended the quarter with $134.4 million available in cash and cash equivalents, up from $79.5 million in the prior year period. It currently offers a quarterly dividend of $0.62 per share and has a dividend yield of 4.33%, as of April 17. In 2024, the company achieved its 38th consecutive annual dividend hike, which makes TMP one of the best Dividend Champions on our list.
14. Brady Corporation (NYSE:BRC)
Number of Hedge Fund Holders: 15
Brady Corporation (NYSE:BRC) is an American company that specializes in the development and manufacturing of specialty products and technical equipment. The company’s long-term growth strategy is shaped by its commitment to innovation and operational efficiency. It has made substantial investments in research and development to strengthen its product portfolio and adapt to changing customer needs. The company’s success largely depends on creating proprietary solutions, providing outstanding customer support, and advancing its digital capabilities. The stock has surged by over 15% in the past 12 months.
In fiscal Q2 2025, Brady Corporation (NYSE:BRC) posted a revenue of $356.6 million, up 10.55% from the same period last year. However, the revenue missed analysts’ estimates by $2.53 million. The company’s growth was largely driven by acquisitions, which contributed 10.2%, while organic sales (excluding the impact of acquisitions) rose by 2.6%, reflecting stable and sustainable progress. A notable milestone for Brady was the introduction of new products such as the i7500 high-speed printer, underscoring its focus on innovation. Despite this, income before taxes fell by 6.8%, pointing to pressure on profit margins. On an adjusted basis, however, income before taxes increased by 7.2%, indicating gains in operational efficiency and stronger cash management.
Brady Corporation (NYSE:BRC)’s cash position also remained stable. The company ended the quarter with over $138.4 million available in cash and cash equivalents and generated an operating cash flow of $39.6 million, up from $36.1 million in the prior-year period. This strong balance sheet enabled the company to raise its payouts for 39 consecutive years, which makes BRC one of the best Dividend Champions to monitor. Currently, it offers a quarterly dividend of $0.24 per share and has a dividend yield of 1.42%, as of April 17.
13. MGE Energy, Inc. (NASDAQ:MGEE)
Number of Hedge Fund Holders: 15
MGE Energy, Inc. (NASDAQ:MGEE) is an American utility holding company that produces and distributes electricity and natural gas. The company’s earnings for the fourth quarter of 2024 came in at $22 million, up from $20 million in the same period last year. It has continued to expand its asset base by investing in new, cost-efficient renewable energy projects. The rise in electric earnings for 2024 was partly driven by increased electric investments added to the rate base. One key development was the completion of the Paris solar project in December 2024.
Meanwhile, gas retail therm deliveries declined by about 4% compared to the previous year, largely due to warmer-than-usual weather throughout 2024. Gas consumption among commercial and industrial users also fell by roughly 4%, with residential usage seeing a similar decrease. MGE Energy, Inc. (NASDAQ:MGEE)’s revenues for the quarter came in at $171.4 million, which showed growth from $164.6 million.
On January 17, MGE Energy, Inc. (NASDAQ:MGEE) declared a quarterly dividend of $0.45 per share, which was in line with its previous dividend. Overall, the company is close to becoming a Dividend King, having raised its payouts for 49 years in a row. The stock has a dividend yield of 1.97%, as of April 17.
