7 No-Brainer Dividend Growth Stocks to Buy Right Now

Core Insights - Dividend growth investing provides a valuable opportunity for compounding wealth through businesses that reward shareholders with dividends, particularly those with five-year dividend growth rates above 6% and payout ratios under 75% [1][2] Group 1: Characteristics of Elite Dividend Growth Stocks - Companies that grow dividends faster than 6% annually while maintaining conservative payout ratios benefit from accelerating earnings power and disciplined capital allocation [2] - These companies often possess competitive advantages such as wide economic moats, pricing power, network effects, and regulatory barriers that protect them from competitors [2] Group 2: Featured Dividend Growth Stocks - American Express (AXP): Offers a 1.09% dividend yield with a 20.4% payout ratio and a 10.8% annualized dividend growth rate over the past 10 years, trading at 19.8 times forward earnings, slightly below the S&P 500 [5][6] - Visa (V): Provides a 0.65% dividend yield supported by a 22.3% payout ratio and a 17.4% annual dividend growth rate, trading at 31.5 times forward earnings, reflecting its premium valuation due to consistent growth and scale advantages [8][9] - Costco (COST): Delivers a 0.51% dividend yield with a 27% payout ratio and a 10.1% annual dividend growth rate, trading at 48.7 times forward earnings, earning its premium through operational execution and market share gains [10][11] - Target (TGT): Offers a 4.5% dividend yield backed by a 50.1% payout ratio and an 8% annual dividend growth rate, trading at 10.5 times forward earnings, representing compelling value in the retail sector [12][13] - S&P Global (SPGI): Provides a 0.73% dividend yield with a 29% payout ratio and an 11.9% annual dividend growth rate, trading at 30.8 times forward earnings, justified by its market-leading positions in financial intelligence [14][15] - Nvidia (NVDA): Offers a minimal 0.03% dividend yield with a 1.16% payout ratio and a 16.7% annual dividend growth rate, trading at 31.4 times forward earnings, reflecting its dominant position in AI and computing [16][17] - ASML (ASML): Delivers a 1.12% dividend yield supported by a 28.5% payout ratio and a remarkable 24.7% annual dividend growth rate, trading at 28 times forward earnings, due to its technological monopoly in semiconductor equipment [18][19]