3 No-Brainer Dividend Growth Stocks to Buy Right Now

In the ever-evolving landscape of investment opportunities, dividend growth stocks stand out as a beacon of stability and long-term value. As we navigate through 2025, the allure of these stocks remains undiminished, especially for investors seeking reliable income streams and potential for capital appreciation. Here, we delve into three no-brainer dividend growth stocks that are poised to deliver exceptional returns in the coming years.

Brookfield Renewable: Powering the Future

Brookfield Renewable (BEP, BEPC) is a leading global renewable energy producer with a strong competitive advantage. The company's long-term contracts, which support 90% of its revenue, ensure steady, growing income. These agreements index about 70% of its revenue to inflation, providing a robust financial foundation. Brookfield Renewable has grown its dividend at a 6% compound annual rate since 2001, marking the 14th straight year that Brookfield hiked its dividend payment by at least 5%. The company's multiple growth drivers, including margin enhancement activities, a massive development pipeline, and acquisitions, are expected to grow its funds from operations (FFO) per share by more than 10% annually for at least the next decade. This positions Brookfield Renewable as a top dividend growth stock to buy and hold for the long run.

Realty Income: Steady as She Goes

Realty Income (O) is a real estate investment trust (REIT) with a diversified commercial real estate portfolio, including retail, industrial, gaming, and other property types. The company net leases its properties under long-term agreements with many of the world's leading companies, providing very stable rental income. Realty Income has boosted its monthly dividend payment 130 times since its public market listing in 1994, with dividend growth streaks of 30 straight years and 110 quarters in a row. The company has grown its dividend at a 4.3% compound annual rate during that period, and it has one of the strongest financial profiles in the REIT sector. With the estimated total addressable market for net lease real estate at $14 trillion, Realty Income has a very long growth runway, making it an attractive dividend growth stock for investors.

Medtronic: Innovating for the Future

Medtronic (MDT) is a medical technology giant with a diversified portfolio of products that generate very durable and growing cash flows. The company aims to return a minimum of 50% of its free cash flow to investors via dividends and share repurchases. Medtronic delivered its 47th annual dividend increase last May, growing its dividend payment at a 16% compound annual rate during that period. The company has a large and growing market opportunity for its existing products and continues to invest heavily in research and development to discover and test new medical devices. Medtronic's strong balance sheet and flexible financial profile put the company in a very healthy position to continue increasing its dividend in the decades to come, making it a top dividend growth stock to consider.

The Broader Market Context

The broader market index has consistently increased its dividends with an average annual growth rate of just over 7% over the last decade. In contrast, the recommended stocks, which are Dividend Aristocrats, have shown much higher dividend growth rates. For instance, Brookfield Renewable has grown its dividend at a 6% compound annual rate since 2001, and Medtronic has grown its dividend payment at a 16% compound annual rate. This comparison suggests that these stocks have a strong potential for future growth, as they have a proven track record of increasing their dividends at a rate that outpaces the broader market. Additionally, the consistent dividend growth of these companies indicates their financial stability and strong business models, which are essential for long-term investment success.

Conclusion

In conclusion, Brookfield Renewable, Realty Income, and Medtronic stand out as no-brainer dividend growth stocks to buy right now. Their strong competitive advantages, long histories of dividend increases, consistent earnings growth, and robust financial profiles make them ideal investments for long-term investors seeking reliable income streams and potential for capital appreciation. As we look ahead to 2025 and beyond, these stocks are poised to deliver exceptional returns and provide investors with the stability and growth they seek.