2 Dividend Stocks to Double Up On Right Now

Northrup Grumman (NYSE: NOC), the U.S.-based aerospace and defense company, and Union Pacific (NYSE: UNP), the freight railroad company, are two of the top dividend stocks investors should consider loading up on right now.

Both of these industrial stocks have strong tailwinds that could help them deliver outsized growth while they continue to increase their dividends.

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The case for Northrup Grumman

Northrup Grumman's shares have risen by around 33% so far this year. A lot of that has been driven by the conflicts in the Middle East, which will likely result in even greater defense spending. Looking past short-term spikes, here are three reasons to consider this stock as a long-term holding.

At its current share price, the stock's dividend yield of 1.4% is only slightly above the S&P 500's average, but Northrup Grumman has a strong commitment to dividend growth. It has increased its payouts for 22 consecutive years, including an 11% increase in 2025.

The defense company is in a good position to continue paying and raising its dividend. It reported $41.9 billion in revenue in 2025, up 2.2%, and earnings per share (EPS) of $29.14, up 2.6%. Over the past decade, the company's annual revenues have grown by more than 71%, and annual EPS is up by more than 138%. During that time, the stock has delivered a total return of around 360%.

As of the end of 2025, Northrup's backlog was up 5% year over year to a record $95.7 billion. That means the company has plenty of long-term contracts that will drive revenue for years, regardless of short-term economic fluctuations.

Moreover, many of the company's government contracts are for high-priority items that are unlikely to be cut, including the B-21 Raider stealth bomber, which is just now beginning to ramp up to full production, and the replacement of the Sentinel intercontinental ballistic missile fleet. The company is also the lead partner for the Space Development Agency, with contracts for 150 satellites for communications and missile tracking.

Northrup is using technology to make its fighter planes and weapons systems more effective, making them more valuable and widening its competitive moat. One example is that many of the B-21 stealth bomber's systems can be updated merely with software patches, rather than requiring costly hardware refits.

Perhaps the most obvious example is the company's Integrated Viper Electronic Warfare Suite AN/ALQ-257 system that enables F-16s to detect, identify, and jam modern radar systems.

The case for Union Pacific

Union Pacific's shares are up more than 14% this year. The company operates a key piece of the U.S. logistics platform, particularly in the West. It operates more than 32,000 miles of track across 23 states. The company is seeing improved productivity, thanks in part to artificial intelligence and better network efficiency.

Here are three reasons to buy Union Pacific stock now.

The company's proposed $85 billion merger with Norfolk Southern would create the first intercontinental railroad in the U.S. That historic deal would mean revenue synergies and cost efficiencies.

That's a big if, though, as the merger application was recently shot down by the federal Surface Transportation Board, which described the proposal as incomplete and inconsistent regarding its impact on other transportation stakeholders. Among the regulator's jobs is to ensure a competitive environment in interstate transportation, so it is understandable that it would be concerned about how much sway a transcontinental railroad system would hold.

Union Pacific and Norfolk Southern plan to present a revised merger application in April. The biggest argument they have in their favor is that there is little geographic overlap between the lines they operate, so a merger won't remove competition in most cities. Another benefit for national shipping is that it would remove the Chicago bottleneck, where goods have to be transferred from one railway to the next, and thus make railroad shipping more competitive against long-haul trucking.

Union Pacific has raised its dividends annually for 19 consecutive years, including a 2.9% hike in 2025. The yield, at its current share price, is around 2%. Over the past decade, it has increased its payout by 150%, and the stock's total return is just under 300%.

Union Pacific reported 2025 revenue of $24.5 billion, up 1%, and EPS of $11.98, up 8%. The company said it expects mid-single-digit percentage EPS growth again in 2026.

Union Pacific's valuation is in line with that of its peers, but it has delivered higher returns on invested capital than they have.

Either one is a good dividend stock

Northrop Grumman and Union Pacific both make compelling cases for dividend investors because of their dominant market positions and ability to leverage technological shifts. Northrop's next-generation stealth software and its backlog of government contracts make its dividend safe, while Union Pacific's key place in U.S. logistics, built over its 127 years in business, gives it an edge over its competitors.

James Halley has positions in Union Pacific. The Motley Fool recommends Union Pacific. The Motley Fool has a disclosure policy.