3 Dividend Champions That Could Double Their Dividends From Here

The Dividend Aristocrats®, or S&P 500 companies that have raised their dividends for at least 25 consecutive years, are supposedly in a class of their own (the term Dividend Aristocrats® is a registered trademark of Standard & Poor's Financial Services LLC). Fewer than 70 companies have won this distinction. But there are also under-reported tiers within this niche, with some Dividend Aristocrats® hanging onto the title by their fingernails with increases of as little as half a penny per share. Others are regularly announcing dividend increases that outpace the annual inflation rate. You don't need to be told which category performs best as an investment, both in income and capital appreciation.

Here are three Dividend Aristocrats® that have raised their payouts at inflation-crushing rates in recent years, and can keep it up in the years ahead.

1. Lowe's

This $136 billion home improvement retailer has increased its dividend for over 60 consecutive years now. That's extremely impressive in its own right, as it gives the company not just Dividend Aristocrat® but also Dividend King status, a distinction that barely one in 1,000 companies achieves.

But what's even more striking is that, even 60 years later, Lowe's (NYSE: LOW) rate of dividend increases isn't slowing down. While its 2025 dividend hike of 4% wasn't enormous, it clearly outpaced inflation for the year, and is part of a streak that has led to Lowe's doubling its dividend since 2021.

For context, the U.S. economy has seen nearly 18% inflation since 2021. Lowe's dividend growth has more than quintupled the rate of inflation post-pandemic, something few companies can say.

What might the future hold for investors who buy Lowe's today? The company has a payout ratio target of 35%, so management will try to pay that percentage of its net income out as dividends in the years ahead. Its current payout ratio is roughly that, at 38%, so investors could expect dividend growth to roughly match any increases in net income.

This means that Lowe's recent streak of acquisitions could benefit its dividend, after the company acquired Artisan Design Group and Foundation Building Materials earlier this year. Lowe's shelled out over $10 billion on these companies to make good on its strategy to expand into the professional market by enhancing its distribution channels and adding materials for residential and commercial builders to its product lineup. Analysts are forecasting 8% growth for the company next year, and these are the same analysts who have underestimated Lowe's earnings growth in each of the last four quarters.

2. A. O. Smith

A. O. Smith (NYSE: AOS) is a 151-year-old company that makes water heaters. And while that doesn't sound exciting, it's a very dependable business that has raised its dividend for over 30 years, including two inflation-beating hikes of 6% in both 2025 and 2024.

To give you a long-term sense of this company's dividend-growing capacity, it has increased payouts by 1,600% since 2000. It has a payout ratio of 37%, which is even lower than that of Lowe's, and is a good sign for future dividend growth.

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An even better sign for A. O. Smith's dividend growth prospects is its share buyback program. The company bought back 3.8 million shares in the first half of 2025, spending $251 million on share repurchases. Buybacks can make dividend growth easier by reducing the number of shares for which a company is on the hook for payouts. Management plans to spend about $150 million more on share buybacks for the second half of this year, and raised its earnings per share guidance to $3.70 to $3.90 per share, a 2% increase over 2024.

While that's not a big rise in projected earnings, it's notable that the company could raise earnings at all amid the tariff uncertainty that is hitting industrial manufacturers hard. This guidance already assumes steel prices will rise 15% in the second half of 2025, and that tariffs will increase the total costs of goods by 5% for the fiscal year. Whether that happens remains to be seen, but in the meantime, no one can accuse the company of issuing earnings guidance with rose-colored glasses.

A trade deal announcement in the next few weeks could also lift A. O. Smith's shares, which for now carry a price-to-earnings ratio of 17.5, significantly below the S&P 500 average of 31.5. For now, the stock yields 2%, and anyone wishing to collect its next dividend will have to buy before the ex-dividend date on Oct. 31.

3. Automatic Data Processing

Automatic Data Processing (NASDAQ: ADP) is a software application company that, like Lowe's, just hit a landmark very few companies achieve: 50 years of annual dividend increases, and, with it, Dividend King status.

The christening came with a 10% payout increase, which thrashed the 3% inflation recorded last year. The company has raised its payout by 2,100% since 2000.

Clearly, no one can accuse this company of giving paltry dividend hikes, in either the short or long term. But can the hot streak continue?

Automatic Data Processing's payout ratio of 60% is higher than that of Lowe's or A. O. Smith, and it's somewhat outside of the 35% to 55% range that's generally thought of as healthy for serial dividend growers. However, it's actually on the low end of the company's historical payout ratio range of 58% to 68%. The company's earnings growth of 9.8% also gives it some breathing room on this front.

Finally, like A. O. Smith, Automatic Data Processing is buying back its own shares at a healthy clip, with $324 million in shares repurchased in the first half of 2025. For 2026, management has not signaled any concrete buyback plans, but the company has repurchased shares every year for 10 years now. Should that trend continue, Automatic Data Processing's dividend growth prospects will only get brighter.

The company pays a 2.2% dividend yield today, well above the S&P 500 average, and is well positioned to continue growing that stream significantly in the years ahead.

William Dahl has no position in any of the stocks mentioned in this article. The Motley Fool has positions in and recommends A. O. Smith. The Motley Fool recommends Lowe's Companies. The Motley Fool has a disclosure policy.