Dividend stock investing has proved to be a superior investing strategy. Data from Hartford Funds and Ned Davis Research show over the last 50 years, stocks on the S&P 500 that initiate a dividend and then raise them have outperformed all other stocks, often by a wide margin.
Dividend growers returned 10.2% annually, on average, while stocks that didn’t increase their payouts returned 9.2%. For companies that didn’t pay a dividend, they returned 4.3% (stocks that cut their payout not surprisingly had negative returns).
Moreover, stocks raising their dividends beat all classes but exhibited lower volatility, an important consideration in today’s market environment. Paying dividends shows these companies tend to have strong fundamentals, a long history of operation, profitability, and solid cash flows.
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Dividend stock investing tends to beat all other strategies, particularly when focused on stocks that raise their payouts.
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Dividend Aristocrats are stocks on the S&P 500 that have raised their dividends for 25 consecutive years or more, making them a perfect spot to seek out dividend growers.
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One of the best areas to look for dividend growers is amongst Dividend Aristocrats, companies on the benchmark index that have increased their payouts for 25 years or more.
Three new stocks were added to this group of dividend royalty in 2025. That doesn’t mean you should just run out and buy their stocks, but it’s a worthwhile exercise to see if they warrant attention and adding to your portfolio.
Erie Indemnity (ERIE)
Erie Indemnity (NASDAQ:ERIE) is a property and casualty insurance company offering auto, home, business, and life insurance. It makes sense an insurer would make the list because they have significant cash flows from the premiums they collect upfront and only pay out when claims are made. They use these cash piles to invest, buy back stock, and pay dividends. It’s why Aflac (NYSE:AFL), Chubb (NYSE:CB), and Cincinnati Financial (NASDAQ:CINF) are also Aristocrats.
Founded in 1925, Erie has paid regular dividends since 1933 and began consistently increasing its payout in 2000. It was able to do so even during the Great Recession when earnings plunged 69%, though it remained profitable.
Over the past decade, though, Erie has grown earnings at an average of 11% annually and has increased its dividend, which currently yields 1.3%, at a 7.6% compound annual growth rate (CAGR). Earnings grew 34% last year.
With a solid business that has gone through numerous economic shocks over the decades, Erie Indemnity looks like a quality addition to the Dividend Aristocrats.
Eversource Energy (ES)
Regulated New England utility Eversource Energy (NYSE:ES) is the second new addition to dividend royalty. It provides gas and electricity to 4.4 million customers across Connecticut, Massachusetts, and New Hampshire. It finally sold off its wind energy business so it will now be able to focus solely on its utility operations and finance its transmission and distribution growth projects that will better earn a steady regulated return.
Eversource’s operations extend as far back as the mid-19th century, but the company of today began in 1966 when Connecticut Light & Power Company, Western Massachusetts Electric Company, and Hartford Electric Light Company merged to form Northeast Utilities. It was rebranded as Eversource in 2015.
While it began paying a dividend at the start, it terminated the payout in 1998, only to reinstate it the following year. It has raised its dividend at a 6.3% CAGR for the last decade, and its most recent increase that lifted it into the dividend aristocracy was 5.2%. Yet the company also recently experienced earnings losses in 2023, though it bounced back last year.
Eversource Energy expects challenges this year, but sees better times beyond, which suggests ES stock might not be the first dividend stock to buy.
FactSet Research Systems (FDS)
The third company added to the Dividend Aristocrats is financial data and software provider FactSet Research Systems (NYSE:FDS). It serves buy-side asset managers and sell-side investment bankers through a subscription-based model. While it is its biggest revenue generator, it is also its slowest growing. The fastest growers — wealth and CUSIP Global Services — comprise just 30% of the total.
FactSet has come under pressure from asset managers during market downturns, and the dramatic slowdown in dealmaking. The Financial Times said the volume of global takeovers dropped to a 10-year low in the first quarter. While it faces competition from a number of high-profile rivals, like Bloomberg, it offers a differentiated product that is essential for institutional investors.
The financial data stock has grown both earnings and its dividend at a better than 10% CAGR for the past decade and its 9% CAGR for free cash flow handily covers the payout, which currently yields 1% annually.
With a business that has mostly grown organically, and a viable and necessary subscription service, FactSet seems well-positioned to maintain the steady long-term growth trajectory it’s been on.