7 No-Brainer Dividend Growth Stocks to Buy Right Now

While many investors chase fleeting market trends, dividend growth investing offers something far more valuable. Namely, compounding wealth through businesses that pay you to own them. Moreover, elite dividend growth stocks, defined as those with five-year dividend growth rates above 6% and payout ratios under 75%, have a stellar record of delivering superior returns to the benchmark S&P 500.

This outperformance reveals a deeper truth about exceptional businesses. Companies that consistently grow dividends faster than 6% annually while maintaining conservative payout ratios possess two critical advantages: accelerating earnings power and disciplined capital allocation. Equally as important, these traits typically signal businesses protected by wide economic moats, pricing power, network effects, and/or regulatory barriers that competitors can't easily overcome.

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These seven blue chip dividend stocks tick all these boxes. Each combines elite dividend growth with fortress-like balance sheets and market-leading positions that should compound wealth for decades. For investors seeking to build generational wealth or generate reliable passive income, these companies offer a rare blend of growth, income, and downside protection in an increasingly volatile market. Read on to find out more.

Financial powerhouse with exceptional shareholder rewards

American Express (NYSE: AXP) operates a closed-loop payment network and premium financial services platform, serving affluent consumers and businesses. The credit card giant offers a modest 1.09% dividend yield, backed by a conservative 20.4% payout ratio, leaving ample room for future increases.

Its 10.8% annualized dividend growth rate over the past 10 years demonstrates management's rock-solid commitment to returning capital to shareholders. At 19.8 times forward earnings versus 20.7 times for the S&P 500 (defined as the "broader market" hereafter), American Express stock trades at a slight discount to the benchmark index. This financial services titan thus qualifies as a value stock despite offering double-digit dividend growth and exposure to the rapidly expanding digital payments ecosystem.

The toll booth of global commerce

Visa (NYSE: V) operates the world's largest payment processing network, connecting consumers, merchants, and financial institutions across more than 200 countries. The payment giant offers a modest 0.65% dividend yield supported by a conservative 22.3% payout ratio that ensures long-term sustainability.

Its remarkable 17.4% annual dividend growth rate over the past 10 years reflects management's commitment to increasing shareholder returns. At 31.5 times forward earnings, Visa stock trades at a significant premium to the broader market. This payments infrastructure leader commands its premium valuation through consistent growth, massive scale advantages, and exceptional profitability within the expanding digital payments ecosystem.

Membership-driven retail excellence

Costco (NASDAQ: COST) operates a membership warehouse business model that generates consistent revenue and maintains industry-leading customer retention exceeding 90%. The retail giant delivers a modest 0.51% dividend yield, underpinned by a conservative 27% payout ratio that provides stability.

Its strong 10.1% annual dividend growth rate over the past 10 years demonstrates management's steady commitment to increasing shareholder returns. The one clear drawback is that at 48.7 times forward earnings, Costco stock commands a substantial premium to the benchmark index. This retail powerhouse earns its premium valuation through exceptional operational execution, pricing advantages, and consistent market share gains across economic cycles.

Retail resilience with attractive income

Target (NYSE: TGT) maintains a differentiated retail position through exclusive brand partnerships, omnichannel capabilities, and strategic store placements nationwide. The retail leader provides a substantial 4.5% dividend yield backed by a 50.1% payout ratio that balances reinvestment and shareholder returns.

Its 8% annual dividend growth rate over the past 10 years showcases management's consistent approach to rewarding loyal shareholders. At 10.5 times forward earnings, Target stock trades at a significant discount to the broader market. This retail standout represents compelling value with its combination of current income, consistent dividend growth, and well-executed merchandising strategy in the fiercely competitive retail landscape.

Data monopoly with pricing power

S&P Global (NYSE: SPGI) delivers critical financial intelligence through credit ratings, data services, and analytics that power global markets and investment decisions. The information services provider offers a modest 0.73% dividend yield supported by a conservative 29% payout ratio that enables future growth.

Its notable 11.9% annual dividend growth rate over the past 10 years highlights management's commitment to increasing cash returns. At 30.8 times forward earnings, S&P Global stock trades at a premium to the benchmark index. This financial data leader deserves its premium valuation through market-leading positions in credit ratings, essential market intelligence, and recurring revenue streams that power sustainable growth.

Semiconductor leadership fueling AI revolution

Nvidia (NASDAQ: NVDA) designs advanced graphics and computing solutions that power artificial intelligence (AI), data centers, and next-generation applications worldwide. The technology leader provides a minimal 0.03% dividend yield maintained by an ultra-low 1.16% payout ratio that prioritizes reinvestment for growth.

Its extraordinary 16.7% annual dividend growth rate over the past 10 years demonstrates management's balanced approach despite emphasizing capital appreciation. At 31.4 times forward earnings, Nvidia stock commands a significant premium to the benchmark S&P 500. This semiconductor powerhouse merits its premium through dominant positions in AI computing, data center acceleration, and cutting-edge graphics technology driving the next computing revolution.

Semiconductor equipment monopoly

ASML (NASDAQ: ASML) manufactures the advanced lithography systems required for producing the world's most sophisticated semiconductor chips used in computing, mobile, and AI applications. The equipment maker delivers a respectable 1.12% dividend yield supported by a conservative 28.5% payout ratio that ensures future flexibility.

Its exceptional 24.7% annual dividend growth rate over the past 10 years -- tops among these seven stocks -- reflects management's aggressive approach to increasing shareholder returns. At 28 times forward earnings, ASML stock trades at a premium valuation to the broader market. This semiconductor equipment leader earns its premium valuation through what amounts to a technological monopoly in its field, a critical position in the global chip supply chain, and continued innovation driving the advancement of computing worldwide.

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American Express is an advertising partner of Motley Fool Money. George Budwell has positions in Costco Wholesale, Nvidia, Target, and Visa. The Motley Fool has positions in and recommends ASML, Costco Wholesale, Nvidia, S&P Global, Target, and Visa. The Motley Fool has a disclosure policy.