Top US Dividend Growth Stocks for 2025

Dividend growth investing is a powerful long-term wealth-building strategy that focuses on companies with a strong track record of consistently increasing their dividend payouts. Unlike high-yield stocks that may cut dividends during economic downturns, dividend growth stocks offer stability, financial strength, and compound wealth accumulation over time.

For UK investors looking to tap into the US stock market, choosing reliable dividend growth stocks can be a strategic move, especially in times of economic uncertainty. In this article, we’ll explore some of the best US stocks for dividend growth investing in 2025, highlighting their dividend history, financial outlook, and potential for continued growth.

Before we jump to the article, you might be interested in a couple of challenges that we started this year in which we are purchasing a stock every week and then comparing in performance every month and at the end of each year. The challenges are one for growth stocks and one for dividend stocks. Now, time to see these good US stocks for dividend growth.

1. Johnson & Johnson (NYSE: JNJ)

Company Overview

Johnson & Johnson is a global leader in healthcare, with a diversified business spanning pharmaceuticals, medical devices, and consumer health products. The company has been a dividend aristocrat for over six decades, demonstrating resilience and consistency in shareholder returns.

Dividend Performance

• Annual Dividend: $4.96 per share
• Dividend Yield: 3.1%
• Years of Consecutive Dividend Growth: 62
• Payout Ratio: 45%
• Next Dividend Payment Date: March 15, 2025

Growth Prospects & Financial Outlook

Johnson & Johnson has maintained steady revenue growth, fueled by its strong pharmaceutical pipeline and medical device innovations. Analysts estimate a 5% annual revenue increase over the next five years. With a CAGR (compound annual growth rate) of around 6% in dividends, it remains an attractive pick for long-term investors.

Should You Buy?

JNJ is a reliable choice for income-seeking investors due to its strong financials, low payout ratio, and commitment to dividend growth. Analysts set a 12-month price target of $175-$185, offering moderate upside potential as currently is sitting at ~$162.

2. The Coca-Cola Company (NYSE: KO)

Company Overview

Coca-Cola is one of the world’s most recognised brands, dominating the global beverage market. The company has successfully diversified its portfolio to include healthier beverage options, maintaining its status as a top dividend growth stock.

Dividend Performance

• Annual Dividend: $2.04 per share
• Dividend Yield: 2.86%
• Years of Consecutive Dividend Growth: 62
• Payout Ratio: 70%
• Next Dividend Payment Date: April 1, 2025

Growth Prospects & Financial Outlook

Despite inflationary pressures, Coca-Cola has maintained strong pricing power and brand loyalty. Analysts forecast 4%-5% revenue growth annually, supported by product innovation and expansion in emerging markets. The company’s dividend CAGR has averaged 4% over the past five years.

Should You Buy?

With a stable business model and consistent dividend increases, KO is a solid choice for defensive investors. Analysts project a 12-month price target of $75-$80 and the stock is currently in the range of $71.

3. Microsoft Corporation (NASDAQ: MSFT)

Company Overview

Microsoft is a tech powerhouse with a dominant presence in cloud computing, AI, and software solutions. While its dividend yield is modest, the company’s impressive dividend growth rate makes it an attractive long-term investment, not only for its dividend, but also for its potential appreciation.

Dividend Performance

• Annual Dividend: $3.32 per share
• Dividend Yield: 0.81%
• Years of Consecutive Dividend Growth: 20
• Payout Ratio: 30%
• Next Dividend Payment Date: March 14, 2025

Growth Prospects & Financial Outlook

Microsoft’s Azure cloud platform continues to drive revenue, with projected CAGR of 15% in cloud services. The company has a 5-year dividend CAGR of 10%, making it a strong pick for growth-oriented dividend investors.

Should You Buy?

MSFT is ideal for investors looking for a mix of dividend growth and capital appreciation. Analysts have a 12-month price target of $430-$450, and the stock is at the $408 level, good choice reflecting continued strong earnings potential.

4. Visa Inc. (NYSE: V)

Company Overview

Visa is a global leader in digital payments, benefiting from the long-term transition away from cash transactions. Its strong profit margins and low payout ratio allow for consistent dividend growth.

Dividend Performance

• Annual Dividend: $2.36 per share
• Dividend Yield: 0.68%
• Years of Consecutive Dividend Growth: 14
• Payout Ratio: 20%
• Next Dividend Payment Date: March 5, 2025

Growth Prospects & Financial Outlook

Visa’s revenue is expected to grow 10%-12% annually, supported by increased adoption of digital payments worldwide. The company has maintained a CAGR of 15% in dividend growth over the past decade.

Should You Buy?

Visa is an excellent long-term investment for dividend growth, offering both stability and expansion potential. Analysts have a 12-month price target of $360-$380 and the stock is sitting at $348.

5. Apple Inc. (NASDAQ: AAPL)

Company Overview

Apple remains one of the most valuable companies in the world fighting for the crown with NVDA, generating massive cash flow from its ecosystem of devices, services, and software.

Dividend Performance

• Annual Dividend: $1.00 per share
• Dividend Yield: 0.41%
• Years of Consecutive Dividend Growth: 12
• Payout Ratio: 15%
• Next Dividend Payment Date: February 28, 2025

Growth Prospects & Financial Outlook

Apple’s services business is growing rapidly, contributing to CAGR of 8% in total revenue. The company has a dividend CAGR of 7%, ensuring steady income growth.

Should You Buy?

Apple is an attractive stock for long-term growth and dividend expansion. Analysts have an average 12-month price target of $250, so limited upside as currently is at $245.

Why is it important to invest in dividend growth?

Dividend growth investing is an excellent way to build long-term wealth by focusing on companies with a consistent history of increasing payouts. Stocks like Johnson & Johnson, Coca-Cola, Microsoft, Visa, and Apple offer a mix of reliability, financial strength, and future growth potential. It is important to understand that might be a low yield currently, but that in the long term, looking at the rate of dividend growth these would make a difference.

For UK investors looking to tap into the US stock market, these stocks provide an opportunity to benefit from both rising dividends and capital appreciation. By focusing on strong dividend growth companies, investors can build a resilient and income-generating portfolio that withstands market fluctuations.

Would you consider adding these dividend growth stocks to your portfolio? Let us know your thoughts!