3 Dividend Powerhouse Stocks Yielding Over 3% to Buy Today

In 2024, the average S&P 500 company raised its dividend by 6.4%. That's not bad, considering the inflation rate for the U.S. economy was 2.9% that year. In 2023, the average dividend hike was 5.1%, and S&P 500 companies are expected to raise dividends by 6% to 7% in 2025 when all is said and done.

But dividend percent increases can be misleading. Take the semiconductor giant Nvidia (NASDAQ: NVDA), which announced a 150% dividend increase in 2024. Anyone who owned shares the month before its dividend increase, and its 10-to-1 stock split, would be sitting on a yield that is well below 1%. Nvidia's stock surge has undoubtedly thrilled many investors, but for investors who need income, it hasn't been the answer.

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But a few rare companies today are not only offering considerable yields, but also growing their dividends at a healthy clip. Here are three dividend powerhouses yielding 3% right now that are well positioned to deliver hefty annual dividend hikes in the years ahead.

Dividend powerhouse 1: Essex Property Trust

Headquartered in San Mateo, California, Essex Property Trust (NYSE: ESS) is a real estate investment trust (REIT) that buys, develops, and manages residential properties on the West Coast, with a stake in 257 apartment communities. Valued at $18 billion, its dividend yields 3.9% today.

As a REIT, Essex Property Trust is required to pay 90% of its annual taxable income out to investors in the form of dividends. As it's grown earnings robustly in recent years, this has meant correspondingly large dividend increases. Over the last decade, the company has nearly doubled its dividend, including a 4.9% increase in 2025 that's well above the rate of inflation.

While its payout increases have been healthy in recent years, they have admittedly not been enormous increases. But Essex Property Trust earns a spot on this list because its current yield of 3.9% is already more than triple that of the average S&P 500 firm. Combine that with earnings growth of 39% year over year, and its 31-year history of dividend increases, and the company appears well positioned to ramp up its already significant income stream in the years ahead.

Dividend powerhouse 2: Chevron

Headquartered in Houston, Texas, the $312 billion oil and gas giant Chevron (NYSE: CVX) pays a current dividend yield of 4.4%, almost quadruple that of the average S&P 500 company.

Since 2020, Chevron has raised its dividend by 33%, keeping its payout growth ahead of the 25% inflation seen in that time.

An additional reason to be bullish on Chevron's dividend growth comes from its share repurchase program. While it announced plans to trim its repurchase program in May, as a response to lower oil prices, it still plans to buy back billions of dollars' worth of shares over the next few months as part of its $75 billion share buyback program announced in 2023.

Share buybacks can make dividends more sustainable by reducing the number of outstanding shares that management must pay dividends on. This gives Chevron more breathing room to grow payouts even if oil prices continue to slide in 2026 as expected.

Dividend powerhouse 3: Realty Income

Headquartered in San Diego, California, Realty Income (NYSE: O) is another real estate investment trust, with a portfolio of commercial properties worth over $85 billion.

Its portfolio is highly diversified, collecting rent from 15,500 properties under long-term net lease agreements. Not only that, but that company has properties across 92 separate industries. This diversification could help explain Realty Income's ability to raise its monthly dividend payouts each year since 1994, including during the dot-com collapse, the 2008-2009 Great Recession, the COVID-19 pandemic, and other disasters. All told, it has raised its monthly dividend 132 times since 1994, usually announcing several increases each year.

Realty Income pays a dividend that yields 5.75% at the moment, making it the highest-yielding stock on this list. And its dividend looks secure, because of not only its robust earnings growth of 17.2% year over year last quarter, but also its low debt-to-equity ratio of 74% (for context, a debt-to-equity ratio of 50% to 150% is generally considered to be in the healthy range).

In January, management announced plans to repurchase $2 billion worth of shares in a buyback program lasting through 2028. As with Chevron, share buybacks will give the company more breathing room in future dividend increases.

Over the last decade, Realty Income's cumulative dividend increases have amounted to a payout hike of 46%, outpacing the 36% inflation seen in that time frame.

For investors looking for yields that are well above average and still growing faster than inflation, all three of these companies are buys.

William Dahl owns shares of Realty Income. The Motley Fool has positions in and recommends Chevron, Nvidia, and Realty Income. The Motley Fool has a disclosure policy.