Income investors typically focus on stocks with high dividend yields. However, investors with a longer time horizon should also consider dividend growth stocks, as these may provide more income over the long run.
This is especially true when it comes to quality dividend growth stocks. These 3 dividend growth stocks have raised their dividends for over 25 years, and should be able to continue raising their dividends for many years.
Brown & Brown (BRO)
Brown & Brown Inc. is a leading insurance brokerage firm that provides risk management solutions to both individuals and businesses, with a focus on property & casualty insurance. Brown & Brown has a notably high level of insider ownership.
Overall, Brown & Brown is a very shareholder-friendly company, as its 31-year streak of consecutive dividend increases qualifies it to be a member of the Dividend Aristocrats list.
Brown & Brown posted fourth quarter and full-year earnings on January 27th, 2025, and results were better than expected on both the top and bottom lines. The company posted adjusted earnings-per-share of 86 cents for the quarter, beating estimates by $0.09 per share. Revenue increased 15% year-over-year to $1.18 billion, besting expectations by $60 million. Revenue was up 15.4% year-over-year, with 13.8% of that being organic revenue growth and the balance from acquisitions.
Income before taxes came to $275 million, falling 23% year-over-year as margin fell from 23.2% from 34.7% of revenue. EBITDAC was $390 million on an adjusted basis, rising almost 23% from the year-ago period. On a percentage of revenue basis, EBITDAC margin was 32.9%, up from 31% in last year’s Q4. Net income was up 25%.
Brown & Brown has a remarkable growth track record that includes a decade-long compound annual earnings growth rate of more than 14%. The company’s book value per common share has grown at a similar rate, expanding at ~11% per year over the last ten years. Brown & Brown’s growth strategy is both simple and sustainable.
Over the years, the company has actively acquired smaller insurance brokerage firms and integrated them into its larger operating base. We believe that this strategy has plenty of room left to run
Ecolab Inc. (ECL)
Ecolab Inc. is the global leader in water, hygiene, and energy technologies and services, with a presence in more than 170 countries. The company operates in four major business segments: Global Industrial, Global Institutional, Global Healthcare and Global Pest Elimination.
With 33 years of consecutive dividend increases, Ecolab is a member of the Dividend Aristocrats Index.
In mid-February, Ecolab reported (2/11/25) financial results for the fourth quarter of fiscal 2024. Organic sales grew 4% over the prior year’s quarter, primarily thanks to accelerated growth in the Industrial and Healthcare segments. Thanks to higher volumes, material price hikes and lower supply chain costs, adjusted earnings-per-share grew 17%, from $1.55 to $1.81, and exceeded the analysts’ consensus by $0.01.
Moreover, thanks to robust pricing and new business wins, management provided strong guidance for 2025. It expects earnings-per-share of $7.42-$7.62, implying 13% growth over the prior year at the mid-point.
Ecolab has significantly grown its earnings-per-share in the last decade. This consistent growth record proves the strength of the business model and execution and reveals that the company is on a reliable growth trajectory. Ecolab grew its earnings-per-share by 10.9% per year during 2011-2019.
Growth will partly come from bolt-on acquisitions. The company has historically implemented a strategy of acquiring smaller household products companies and scaling their products through its impressive supply chain.
Colgate-Palmolive (CL)
Colgate-Palmolive has been in existence for more than 200 years, having been founded in 1806. It operates in many consumer staples markets, including Oral Care, Personal Care, Home Care, and more recently, Pet Nutrition. These segments afford the company just over $20 billion in annual revenue.
Colgate-Palmolive posted fourth quarter and full-year earnings on January 31st, 2025. The company managed to beat estimates on earnings-per-share by two cents at 91 cents. Revenue was fractionally lower year-on-year to $4.94 billion, and missed estimates by $50 million. Organic sales were up 4.3%, including a 0.5% negative impact from lower private label pet food volume.
Positive pricing and volume added to organic growth, helping to offset the private label impact. Gross margin expanded 70 basis points despite forex headwinds. Product mix is helping margins, particularly from Hill’s and Oral Care, both of which sport high margins. The company achieved record free cash flow and operating cash flow for the full-year, and reached $20 billion in full-year sales for the first time.
Management reaffirmed organic sales growth of 3% to 5% for 2025, with both pricing and volume contributing roughly equally. Management also expects slight market share gains. Further, the company expects strong cash flow to be used for debt reduction, share repurchases, and investment in growth areas.
CL has increased its dividend for 63 years.
Disclosure: No positions in any stocks mentioned
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Bob Ciura has worked at Sure Dividend since October 2016. He oversees all content for Sure Dividend and its partner sites. Bob received a Bachelor’s degree in Finance from DePaul