Dividend Hikes That Outpace Inflation: Inside the Dividend Kings Club Delivering Double-Digit Growth

The Rarity of True Payout Growth

Finding stocks that consistently increase payouts isn’t just difficult—it’s extraordinarily rare. Of the approximately 54,000 stocks trading globally as of late 2025, fewer than 56 have qualified as Dividend Kings by raising distributions annually for at least 50 consecutive years. But scarcity alone doesn’t tell the full story.

Many so-called Dividend Kings are engaged in what amounts to financial illusion. When dividend hikes consistently lag inflation rates, shareholders are actually experiencing declining purchasing power. Consider industrial machinery manufacturer Dover, which announced a dividend increase of less than 1% last September—a paltry raise against a 2.7% inflation backdrop. Over a five-year span marked by 20% cumulative inflation, Dover managed only a 5% dividend expansion. These nominal increases may preserve official status, but they fail to serve income investors’ fundamental needs.

The true aristocrats of dividend paying are those that not only maintain their historical streak but accelerate payouts well beyond inflation’s corrosive effects. Only three stocks currently fit this elite category.

ADP: The Newly Minted Dividend King Setting the Bar High

Automatic Data Processing (NASDAQ: ADP), headquartered in Roseland, New Jersey, achieved Dividend King status this year upon announcing its 50th consecutive annual payout increase. The human capital management software leader is no ordinary member of this exclusive club.

Last November’s announcement unveiled a 10% dividend hike—part of an even more impressive streak. Since 2021, ADP has boosted its dividend by 83%, substantially outdistancing the 20% inflation accumulated during that period. The current dividend yield of 2.6% towers over the S&P 500’s 1.2% average, reflecting both the company’s cash generation capability and shareholder-friendly capital allocation.

Beyond dividend growth, ADP has simultaneously engineered $12 billion in share repurchases since 2015 while distributing $15 billion in dividends. This dual-pronged approach to shareholder returns creates a compounding effect: fewer shares outstanding makes it mathematically easier to accelerate future dividend hikes. The company’s 61% payout ratio—the percentage of net income directed toward dividends—sits comfortably within sustainable parameters, suggesting the acceleration can persist.

Walmart’s E-Commerce Transformation Powers New Growth Phase

The Arkansas retail behemoth Walmart (NASDAQ: WMT) revealed a 13% dividend hike in February, extending its streak to 52 years of unbroken annual increases. Though the current yield of 0.84% falls below the broader market average, this reflects Walmart’s stock appreciation rather than payout weakness. Over five years, shares have climbed 130%, while the dividend itself advanced 28%—comfortably ahead of inflation’s march.

The technology-driven metamorphosis explains why dividend hike momentum should accelerate. Walmart’s recent migration to Nasdaq, symbolizing its embrace of e-commerce and artificial intelligence infrastructure, has translated into measurable results. E-commerce sales have expanded over 20% for seven consecutive quarters, with the most recent quarter reaching 27% growth. International markets showed even sharper acceleration, with China sales jumping 22% while U.S. same-store sales rose 4.5%.

Operating cash flow reached $27 billion over the last fiscal year—$4.5 billion higher than the prior year. Even allocating a conservative one-third of this incremental cash toward dividend acceleration would support an 18.8% payout boost, suggesting the recent 13% hike represents just the opening move of an expansionary phase.

Lowe’s: Building on Acquisition Synergies

Home improvement retailer Lowe’s (NYSE: LOW) marked its 61st annual dividend increase last May, cementing its standing as a Dividend King with credentials exceeding the baseline 50-year requirement. This year’s 4% raise may appear modest compared to peers, yet context clarifies the company’s strategy.

The recent $8.8 billion acquisition of Foundation Building Materials explains the measured approach. This strategic addition targets the $250 billion addressable market for pro customers, delivering faster fulfillment capabilities and expanded digital tools. With Foundation contributing $6.5 billion in revenue and $635 million in adjusted earnings during 2024, the pre-acquisition year, the foundation exists for dividend acceleration to resume.

Over the preceding five years, Lowe’s had already doubled its dividend—a 100% increase translating to 14.9% annualized growth. The acquisition pause, far from signaling deceleration, represents prudent debt management before resuming the dividend hike trajectory that characterized the company’s recent history.

The Dividend King Paradox

These three stocks embody a paradox within modern markets: despite residing in mature, established sectors (payroll processing, retail, home improvement), they’ve engineered not just dividend preservation but genuine expansion of shareholder distributions. Their ability to compound payout growth while maintaining dominant competitive positions and executing major strategic investments suggests their dividend hike capabilities remain far from exhausted.

For income-focused investors navigating an era of elevated uncertainty, stocks with both the longevity and growth trajectory to outpace inflation offer increasingly rare shelter.