My Top Dividend Growth Stock to Buy in October and Hold Forever
Key Points
Morgan Stanley has been growing its dividend aggressively, most recently with a 15% increase.
Its stock has also been a powerful performer.
- 10 stocks we like better than Morgan Stanley ›
My top dividend growth stock for income-seeking long-term investors to consider is the financial services giant Morgan Stanley (NYSE: MS). It had been off my radar until recently, when I noticed some of its very attractive characteristics.
For starters, it's a solid dividend payer, recently yielding 2.5%. That may not seem like a lot, but that payout has been growing robustly. The recent total annual payout of $4.60 per share is up from $2.95 in 2022 and $1.10 in 2018. Its last increase, this year, was from a quarterly payment of $1 to $1.15 -- a hefty 15% hike.
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The company also rewards shareholders by buying back (and, essentially, retiring) lots of stock. That leaves the remaining shares worth more. (Imagine a pizza being cut into six pieces instead of eight; each piece will be bigger.) The stock's total yield, incorporating the effect of buybacks, was recently 4.8%.
Meanwhile, there's its share price performance:
| Time |
Average Annual Gain |
|---|---|
|
1 year |
19.52% |
|
3 years |
35.36% |
|
5 years |
14.52% |
|
10 years |
20.40% |
|
15 years |
19.01% |
Data source: Morningstar.com, as of Oct. 14, 2026.
See? Impressive!
Don't jump into Morgan Stanley without learning more about it, though. For starters, know that whereas it used to be primarily an investment bank, it's been broadening its scope, doing more wealth and investment management.
It's been succeeding in its plans, too. In its recently reported third quarter:
- Revenue was up 11% year over year, to $20.3 billion.
- Wealth management delivered nearly half of revenue, $9 billion, up 10% year over year.
- Earnings per share grew 8%.
- The company repurchased $1.5 billion of its stock in the quarter, as part of a $20 billion stock-buyback authorization.
In other news, Morgan Stanley is expanding its footprint via a major expansion in Dallas.
If you're seeking growing dividend income, take a closer look at Morgan Stanley and see what you think. It's poised to pay long-term investors well over time.
Should you buy stock in Morgan Stanley right now?
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Selena Maranjian has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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