Dividend growth continues to slow amid uncertainty over U.S. trade policy. Happily, income investors can still count on select S&P 500 stocks to deliver sizable and reliable hikes to their payouts.
U.S. dividend payers collectively raised their payouts by $14 billion in the third quarter, according to the latest data from S&P Dow Jones Indices. While that represents a 43% increase vs Q2, on a year-over-year basis, dividend hikes fell by 0.7%.
A look at dividend growth for the 12 months ending September 2025 is even more dispiriting, with increases falling 23% on a comparable basis.
"Dividend growth continued to be slow in Q3 2025, as concern over forward cash commitment was inhabited by the uncertainty over the evolving tariff polices," writes Howard Silverblatt, senior index analyst at S&P Dow Jones Indices.
Although companies continue to raise their dividends, they are doing so with smaller increases, Silverblatt says, reflecting caution over the impact of tariffs on sales, costs and the general economy.
If there's a bright side to the latest figures, it's that Q3 dividend cuts fell by 25% vs the year-ago period. And for the 12 months ending in September, dividend decreases plunged by more than 36% vs the same period last year.
Long-term income investors know the importance of rising dividends. Shares in companies that raise their dividend payouts like clockwork decade after decade can produce superior total returns (price change plus dividends) over the long run, even if they sport apparently ho-hum yields to begin with.
That's partly because regular dividend increases lift the yield on an investor's original cost basis. Stick around long enough, and the modest yield you received on your initial investment can hit double digits one day.
The S&P 500 Dividend Aristocrats, which are among the best dividend stocks to buy for reliable dividend growth, are a good place to start if you're interested in sussing out such dividend stalwarts. But that doesn't mean you can't find other index components bucking the trend of slower dividend growth. These three stocks are great examples of that.
Stocks with fast-rising dividend payouts
For example, in the more economically sensitive consumer discretionary sector, Royal Caribbean Group (RCL) in September hiked its quarterly dividend by a hefty 33% to $1 from 75 cents per share.
The global cruise ship operator resumed paying quarterly dividends in the third quarter of 2024 – thanks to the ongoing post-pandemic recovery – and has been hiking them ever since.
"We expect bookings to increase and prices to rise, driven by pent-up demand and an affluent clientele," writes Argus Research analyst John Staszak, who rates the consumer discretionary stock at Buy. "We also anticipate fewer cancellations as the cruise industry continues to recover and consumers opt for experiences over products."
The analyst adds that management's efforts to increase total returns should boost RCL's 2026 annual dividend to $4.25 a share, up from a prior forecast of $2.60.
In the really big leagues, there's Microsoft (MSFT). MSFT stock has been killing it on the price charts for ages, but the tech giant also does very well by shareholders when it comes to returning cash through dividends.
In September, Microsoft increased its quarterly payout by 10% to 91 cents per share. The dividend is payable on December 11 to shareholders of record on November 20, which is also the ex-dividend date.
Anyone who put $1,000 into Microsoft stock 20 years ago would be thrilled with the results today. And while its price appreciation has been outstanding, the income component of MSFT stock has been a massive contributor to total returns too.
Have a look at the chart below and you'll see that over the past two decades, MSFT gained 1,780% on a price basis alone. Add in the dividends, and MSFT's total return comes to a whopping 2,600%.
For context, the S&P 500 gained 718%, including dividends, over the same span.
Lastly, in the category of sin stocks, Philip Morris International (PMI) continues to be a reliable dividend grower. The tobacco company in September raised its quarterly dividend by 8.9% to $1.47 per share.
Mature companies with steady free cash flow are often a good place to look for equity income, and PMI has been no exception. The company has increased its annual dividend every year since 2008 – good for a compound annual growth rate of 7.1%.
S&P's Silverblatt notes that current tax and write-off benefits from the 'One Big Beautiful Bill' have added to corporate earnings. That bodes well for more dividend hikes, at least in the shorter term.
"Working with a base case for a higher-level resolution of economic related issues, lower interest rates, and continued U.S. consumer and equity support, Q4 dividends appear in place to set to a new quarterly record," Silverblatt says.
