Dividend growth stocks form a cornerstone of long-term wealth building by offering investors a dual benefit: consistent income streams and opportunities for capital appreciation. These investments represent companies that systematically increase their dividend payments year after year, demonstrating robust financial health, stable business models, and a commitment to returning value to shareholders. Through dividend reinvestment, the power of compounding can substantially amplify total returns over time, while the growing income stream helps preserve purchasing power in inflationary environments.
These stocks also tend to exhibit lower price volatility compared to non-dividend-paying companies, providing a measure of downside protection during market turbulence. Companies with long track records of dividend increases are typically mature industry leaders with dominant market positions, consistent cash flow generation, and disciplined capital allocation. For investors seeking both income and growth potential, dividend growth stocks offer an optimal middle ground between high-yield securities that may lack growth prospects and pure growth companies that provide no current income.
This balanced approach makes dividend growth stocks particularly attractive for retirement portfolios and for investors who desire predictable, escalating income while still capturing long-term market appreciation. The strategy effectively combines the stability of income-generating investments with the wealth-building potential of growth-oriented securities.
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Here are Validea’s top 10 dividend growth stocks for July of 2025.
| Ticker | Company Name | Price | Market Cap ($mil) | PE Ratio | Price/ Sales | Relative Strength | Price/ Book | Price/ Cash Flow | Dividend Yield |
|---|---|---|---|---|---|---|---|---|---|
| TOL | TOLL BROTHERS INC | $121.39 | $11,918 | 9.0 | 1.1 | 62 | 1.5 | 8.1 | 0.8% |
| PHM | PULTEGROUP INC | $113.77 | $22,803 | 8.0 | 1.3 | 61 | 1.9 | 7.5 | 0.7% |
| RJF | RAYMOND JAMES FINANCIAL INC | $158.66 | $32,010 | 15.3 | 2.1 | 78 | 2.7 | 13.5 | 1.2% |
| MRK | MERCK & CO INC | $83.71 | $210,198 | 12.2 | 3.3 | 27 | 4.4 | 9.5 | 3.8% |
| KNSL | KINSALE CAPITAL GROUP INC | $488.96 | $11,398 | 28.2 | 7.1 | 76 | 7.2 | 11.7 | 0.1% |
| NEU | NEWMARKET CORP | $732.01 | $6,906 | 14.6 | 2.5 | 82 | 4.6 | 11.5 | 1.4% |
| FIX | COMFORT SYSTEMS USA INC | $535.02 | $18,873 | 32.1 | 2.6 | 89 | 10.6 | 25.5 | 0.3% |
| PFBC | PREFERRED BANK | $91.86 | $1,142 | 9.8 | 4.1 | 73 | 1.6 | 11.6 | 3.2% |
| AGM | FEDERAL AGRICULTURAL MORTGAGE CORP | $197.94 | $2,082 | 12.2 | 1.3 | 60 | 1.9 | 2.9 | 2.9% |
| RUSHA | RUSH ENTERPRISES INC | $53.73 | $4,191 | 15.0 | 0.5 | 76 | 2.0 | 7.8 | 1.3% |
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