2 High-Yield Dividend Growth Stocks to Buy Now and Hold for Decades

Key Points

• The average dividend payer in the S&P 500 index offers an unattractive yield these days.

• UnitedHealth Group raises its dividend rapidly, but unexpectedly high medical expenses are pressuring profits this year.

• Prologis is the world's largest owner of logistics real estate and an outstanding dividend grower.

• These 10 stocks could mint the next wave of millionaires ›

If you're an income-seeking investor, a buoyant stock market near its all-time high is actually a problem. At recent prices, the average stock in the benchmark S&P 500 index offers an itty-bitty 1.2% dividend yield.

A low average dividend yield suggests the market is overbought, but that doesn't mean there aren't any hidden gems out there. UnitedHealth Group (NYSE: UNH) and Prologis (NYSE: PLD) have been flying under the radar even though they both offer yields that are more than double the benchmark average.

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UnitedHealth Group and Prologis aren't the highest-yielding stocks in the benchmark index, but they are some of its fastest dividend growers. Here's how they could produce heaps of passive income for folks who buy now and hold indefinitely.

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1. UnitedHealth Group

Shares of healthcare benefits management conglomerate UnitedHealth Group are down by about 44% in 2025. The company dramatically suspended its earnings outlook but it hasn't cut its dividend payout.

Shares of UnitedHealth Group offer a 2.9% dividend yield at recent prices. The COVID-19 pandemic made the past five years challenging ones to operate an insurance business, but this didn't stop the company from lifting its dividend payout 77% higher.

In May, UnitedHealth Group's CEO left, and the management that remained suspended forward-looking earnings guidance. In a nutshell, the company didn't raise premiums high enough to compensate for soaring healthcare expenses.

Predicting earnings over the next 12 to 24 months could be a challenge and dividend payouts might not rise very fast in the near term. Investors with more than a few years ahead of retirement, though, can reasonably expect a return to rapid earnings growth several years from now.

The Centers for Medicare and Medicaid Services measured the national health expenditure at $4.9 trillion in 2023, a 7.5% gain over the previous year. The national health expenditure is expected to keep growing at 5.8% annually and consume 20.3% of America's gross domestic product in 2033.

A couple of years ago, UnitedHealth employed or was affiliated with about 10% of the nation's physicians. As the nation's largest employer of medical professionals, it can do more to control costs than any of its peers. This should allow it to retain a leading share of the market for employer-sponsored health insurance.

A stock market that keeps beating down UnitedHealth stock is forgetting that the government and employers that sponsor health plans bear the burden of increasing healthcare expenses, not the middlemen. In the years ahead, UnitedHealth will most likely raise premiums and deliver a steadily growing profit again.

2. Prologis

Lingering aftereffects of the pandemic are also keeping shares of Prologis depressed. This is a real estate investment trust (REIT) that owns about 1.3 billion square feet of warehouses and related buildings that facilitate e-commerce operations.

Prologis stock is down by about 38% from a peak it set in 2022. Despite arguably overbuilding during the pandemic, the REIT was able to raise its dividend payout by 74% over the past five years. At recent prices, it offers a 3.8% yield.

Overbuilding during the pandemic led to a glut of logistics-focused real estate, but it isn't anything Prologis can't handle. An occupancy rate that finished March at 95.5% shows us that the industry leader can still attract all the tenants it needs.

Prologis is an international business, but it still relies on the well-established U.S. market for 86% of its net operating income. Signing net leases that transfer all the variable costs of building ownership to the tenant is popular in America but still a novel concept in many parts of the world that are still building out their commercial logistics infrastructure.

International expansion gives Prologis a lot of room to grow and it has an important advantage that will help it lead the way abroad. An "A" credit rating from S&P Global and an "A2" rating from Moody's allowed this REIT to boast an extremely low 3.2% weighted average interest rate on outstanding debt at the end of March.

Access to cheap capital allows Prologis to offer relatively low lease rates that attract top tenants. Without an end to this virtuous cycle in sight, there's a good chance that it keeps raising its dividend payout at a satisfying pace throughout your retirement years. Adding some shares to a diversified portfolio now looks like the right move.

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Cory Renauer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Moody's, Prologis, and S&P Global. The Motley Fool recommends UnitedHealth Group and recommends the following options: long January 2026 $90 calls on Prologis. The Motley Fool has a disclosure policy.