3 Dividend Champions to Buy and Hold for Decades

There's a saying on Wall Street that "dividends don't lie." Just about every financial metric can be spun by a company's management, but dividends either arrive in the mail or they don't. Companies with a long track record of dividend increases have shown they can succeed in all kinds of market environments, and while dividend stocks may not be considered flashy, even 5% average annual increases can add up powerfully over time.

With the Federal Reserve seen as likely to cut interest rates again in 2026, income investors may be about to give dividend stocks a hard look. Here are three Dividend Champions, or stocks with at least a quarter-century of annual dividend growth, to buy today.

1. Royal Gold

Headquartered in Denver, Colorado, Royal Gold (NASDAQ: RGLD) sports a dividend yield of just 0.77%. But don't let this precious metals company's yield fool you. It may be small, but it is mighty.

Royal Gold has raised its dividend every year since the dividend was first established in July 2000. Since 2021, its payouts have risen by 58.3%, compared to the 19% inflation seen in that time frame.

Take note that Royal Gold's quarter-century streak of dividend increases includes some years-long stretches, during which gold prices floundered. For instance, from 2012 to 2020, when gold prices fell from their record of over $1,700 per ounce and took eight years to recover, Royal Gold's dividend increased by 87%.

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Royal Gold can afford to hike dividends during periods of falling gold prices because of its business model of acquiring royalty interests on mines targeting not just gold but also silver, copper, nickel, zinc, and lead deposits. Of course, higher gold prices certainly don't hurt, and are a major reason why shares have surged 79% over the past year, temporarily driving down the company's dividend yield.

But for long-term investors, what matters most is Royal Gold's ability to grow its dividend every year, regardless of how precious metals are performing.

2. York Water

The Pennsylvania-based water utility company York Water (NASDAQ: YORW) announced its 29th annual dividend hike last November. The increase puts a bow on 620 back-to-back payouts for the company, which has been mailing checks to investors for over 209 years.

Not once since 1816 has York Water missed a dividend, a feat that is believed to be a record for an American company. While its 2025 increase was just 4%, that's still solidly above the 2.7% inflation seen that year. Since 2021, York Water has raised its dividend by 22%, keeping ahead of inflation as well. The company pays a yield of 2.8%, more than double that of the average S&P 500 company.

With year-over-year earnings growing faster than payouts, York Water's sizable dividend looks very sustainable, especially considering its payout ratio of just 63%. Payout ratios anywhere from 50% to 70% -- meaning a company spends that percentage of its net income to cover its dividend -- are generally signs that a payout is sustainable.

3. Caterpillar

Caterpillar (NYSE: CAT), the world's leading manufacturer of construction and mining equipment, has been in business for over 100 years. And for the last 31 of them, Caterpillar has increased its dividend, including a 7% increase announced last June.

That 7% increase is more than twice the rate of inflation seen last year, and longer term, Caterpillar's dividend growth has thrashed inflation, too. Since 2021, its dividend has grown by 46.6%, again more than doubling the inflation rate. And over the last quarter-century, payouts have tripled.

Crucially, Caterpillar's 31-year dividend streak includes the Financial Crisis of 2008-2009, as well as the pandemic lockdowns of 2020-2021, when it announced dividend increases of 16.7% and 7.8%, respectively. Those robust dividend increases, during sharp global slowdowns for the construction industry, show Caterpillar's resilience and management's determination to reward shareholders.

Caterpillar pays a yield of 1% today, slightly below the S&P 500 average. As is the case with Royal Gold, the lower yield is a result of shares surging over the last year, with Caterpillar shares coincidentally rising 79% over the last year as well. Given the company's impressive track record of raising payouts, this yield could catch up to, and then surpass, the S&P 500 average in a hurry.

Past performance is no guarantee of future results, but these three companies stand out for their dividend-growing track records and friendliness to shareholders. For income investors seeking stocks that could ramp up payouts for many years to come, these three Dividend Champions are buys.

William Dahl 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.