5 Dividend Growth Stocks with the Highest Growth Rates

In this article, we discuss 5 dividend growth stocks with the highest growth rates. If you want to read our detailed analysis of dividend growers and their performance over the years, go directly to read 15 Dividend Growth Stocks with the Highest Growth Rates. 

15. S&P Global Inc. (NYSE:SPGI)

12-Month Dividend Growth Rate: 16.3%

S&P Global Inc. (NYSE:SPGI) is a New York-based private banking company. In February, Credit Suisse raised its price target on the stock to $395 with an Outperform rating on the shares, highlighting the company’s active portfolio management efforts.

In Q4 2022, S&P Global Inc. (NYSE:SPGI) reported revenue of nearly $3 billion, which showed a 40.7% growth from the same period last year. Through FY22, the company returned over $1 billion to shareholders in dividends.

S&P Global Inc. (NYSE:SPGI) currently pays a quarterly dividend of $0.90 per share and has a dividend yield of 0.97%, as of February 13. The company has been consistently raising its dividends for the past 50 years and in the past year, its payout grew by 16.3%.

As of the close of Q3 2022, 90 hedge funds tracked by Insider Monkey owned stakes in S&P Global Inc. (NYSE:SPGI), compared with 84 in the previous quarter. These stakes have a collective value of $6.2 billion. TCI Fund Management was the company’s largest stakeholder in Q3.

Andvari Associated mentioned S&P Global Inc. (NYSE:SPGI) in its Q4 2022 investor letter. Here is what the firm has to say:

“S&P Global Inc. (NYSE:SPGI) is another company we own that is part of a duopoly in the business of credit rating. S&P and Moody’s have roughly equal market shares and rate more than 90% of all bonds worldwide. The service provides high value for the cost. A company that chooses to issue debt without a rating will pay an interest rate that could be higher by half of a percent. The cost of a higher interest rate far exceeds any savings gained by not using the services of S&P.

We think of S&P as a toll road that earns fees from its customers in exchange for cost-effective access to capital. As such, the company has extraordinary margins and pricing power and requires little of its own capital to grow. Even after fully reinvesting in its business, S&P still has an excess of cash. In 2021, S&P produced $3.5 billion of free cash from $8.3 billion of revenues. The company returns the majority of its free cash to investors in the form of dividends and share repurchases.”

4. Automatic Data Processing, Inc. (NASDAQ:ADP)

12-Month Dividend Growth Rate: 20%

Automatic Data Processing, Inc. (NASDAQ:ADP) is an American company that provides cloud-based HR management solutions. The company pays a quarterly dividend of $1.25 per share, having raised it by 20% in November 2022. It maintains a 48-year streak of dividend growth, which makes it one of the best dividend growth stocks on our list. The stock’s dividend yield on February 13 came in at 2.21%.

In fiscal Q2 2023, Automatic Data Processing, Inc. (NASDAQ:ADP) posted revenue of $4.4 billion, up 9.08% from the same period last year. The company generated over $1.6 billion in operating cash flow in FY22, up from $1.2 billion in 2021.

In December, Mizuho raised its price target on Automatic Data Processing, Inc. (NASDAQ:ADP) to $285 with a Buy rating on the shares, appreciating the company’s FinTech & Payments segment.

At the end of Q3 2022, 48 hedge funds tracked by Insider Monkey owned stakes in Automatic Data Processing, Inc. (NASDAQ:ADP), up from 39 in the previous quarter. These stakes are valued at over $3.7 billion collectively.

Carillon Tower Advisers mentioned Automatic Data Processing, Inc. (NASDAQ:ADP) in its Q3 2022 investor letter. Here is what the firm has to say:

“Despite a difficult macroeconomic environment, hiring trends have remained robust and Automatic Data Processing, Inc. (NASDAQ:ADP) shares reacted positively to strong quarterly earnings and guidance that was well above consensus expectations.”

3. Target Corporation (NYSE:TGT)

12-Month Dividend Growth Rate: 20%

Target Corporation (NYSE:TGT) is a Minnesota-based big-box store chain that has stores in all states in the US. In February, Piper Sandler raised its price target on the stock to $220 with an Overweight rating on the shares.

On January 12, Target Corporation (NYSE:TGT) declared a quarterly dividend of $1.08 per share, which fell in line with its previous dividend. In the past 12 months, the company has raised its dividend by 20%, which places it as one of the best dividend growth stocks on our list. Overall, the company maintains a 51-year streak of dividend growth. The stock has a dividend yield of 2.51%, as of February 13.

As of the close of Q3 2022, 52 hedge funds tracked by Insider Monkey owned investments in Target Corporation (NYSE:TGT), jumping from 46 a quarter earlier. The consolidated value of stakes owned by these funds is over $2 billion.

Madison Funds mentioned Target Corporation (NYSE:TGT) in its Q4 2022 investor letter. Here is what the firm has to say:

“Despite having already addressed excess inventories, Target Corporation (NYSE:TGT) reported a disappointing third quarter and further cut fourth quarter guidance. Although sales were slightly better than expected, Target saw a slowdown in discretionary sales. Gross margins were below expectations with higher markdowns, increased shrink, and incremental costs. Long-term, we expect Target to be able to return to operating margins in the 6% to 8% range as inventories return to normal levels as well as seeing a normalization in supply chain costs.”

2. Nordson Corporation (NASDAQ:NDSN)

12-Month Dividend Growth Rate: 28%

Nordson Corporation (NASDAQ:NDSN) is an American multinational company, based in Ohio. The company mainly designs equipment for consumer and industrial adhesives, coatings, and sealants. In Q4 2022, the company reported an operating profit of $683.5 million, up 17% from the same period last year. Its operating cash flow at the end of October 2022 amounted to over $513 million.

Nordson Corporation (NASDAQ:NDSN), one of the best dividend growth stocks, currently offers a quarterly dividend of $0.65 per share. In the past 12 months, it has raised its payout by 28% and maintains a 59-year track record of consistent dividend growth. The company’s shares yield at 1.07%, as of February 13.

As of the end of the September quarter, 26 hedge funds tracked by Insider Monkey owned stakes in Nordson Corporation (NASDAQ:NDSN), up from 23 in the preceding quarter. These stakes have a total value of over $146.8 million. Among these hedge funds, Balyasny Asset Management was the company’s largest stakeholder in Q3.

1. Lowe’s Companies, Inc. (NYSE:LOW)

12-Month Dividend Growth Rate: 31%

Lowe’s Companies, Inc. (NYSE:LOW) is a North Carolina-based company that deals in home improvement products and services. In the past 12 months, the company has raised its dividend by 31% and currently pays a quarterly dividend of $1.05 per share. It holds one of the longest dividend growth track records in the market of 59 years. The stock has a dividend yield of 1.99%, as of February 13.

The number of hedge funds tracked by Insider Monkey owning stakes in Lowe’s Companies, Inc. (NYSE:LOW) grew to 61 in Q3 2022, from 53 in the previous quarter. These stakes are valued at over $5.3 billion collectively.

Pershing Square Holdings mentioned Lowe’s Companies, Inc. (NYSE:LOW) in its Q2 2022 investor letter. Here is what the firm has to say:

“Lowe’s Companies, Inc. (NYSE:LOW)’s is a high-quality business with significant long-term earnings growth potential underpinned by a superb management team that is successfully executing a multi-faceted business transformation. (Click here to read the full text)

You can also take a look at 12 Most Promising Small Cap Stocks and 12 Most Undervalued Dow Stocks To Buy

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