When it comes to dividend stocks increasing payouts, most investors think of the dividend aristocrats. These companies have increased their annual dividend payments for 25 years or longer.
However, out of the 503 companies in the S&P 500, only 66 names make the cut. It’s an exclusive club, to be sure. The problem is that dividends are no longer the big deal they once were. As the Washington Post observed in February, “For index members, buybacks have exceeded dividends in every quarter but two since 2010.”
There are many reasons for this which I won’t get into, or we would be here all day. For now, lets take a look at some of the best dividend growth stocks the S&P 500 has to offer.
| Symbol | Company | Price |
| AAON | Aaon Inc. | $86.61 |
| ESAB | ESAB Corp. | $58.72 |
| MAR | Marriott International | $167.79 |
Aaon (AAON)
Aaon (NASDAQ:AAON) used to pay a semi-annual dividend in July and December. However, in March the HVAC solutions provider switched to a quarterly payment of 12 cents, or 48 cents for the year. This change meant an increase of 20% for shareholders in the annual dividend rate when compared to 2022.
In early May, Aaon reported Q1 2023 results that included a 45.5% increase in sales, to a record $266 million. On the bottom line, its net income increased 103.9% to $36.8 million, up from $18 million in 2022.
“We posted a fifth straight quarter of record sales. At the same time, our backlog continued to grow to record levels. Our bookings are still very strong and continue to grow, even when excluding the impact of price increases,” stated CEO Gary Fields.
AAON stock is up 18% in 2023 and 65% YOY.
ESAB (ESAB)
ESAB (NYSE:ESAB) provides welding and cutting products and solutions for many industries, including shipbuilding, pipelines and wind energy. The company’s history dates back to 1904. However, it only became ESAB in April 2022 when it was separated from its former parent, Colfax, which was renamed Enovis (NYSE:ENOV).
On May 11, the company announced it would increase its quarterly cash dividend to 6 cents a share with the July 2023 payment, 20% higher than the previous amount. The annual payment of 24 cents yields 0.40%. It’s important to remember the increase is more important than the yield.
When ESAB reported its Q1 2023 results, it raised its full-year 2023 outlook. It now expects 5.0% core sales growth for the year at the midpoint of its guidance, with earnings per share of $3.95.
Marriott International (MAR)
Marriott International (NASDAQ:MAR) was one of the many travel-related public companies that suspended their quarterly dividend during the pandemic. The hotel operator then resumed its dividend in June 2022 with a 30-cent quarterly payout.
With the June 2023 payment, Marriott is increasing its quarterly payment by 30% to 52 cents. That’s 4 cents higher than its quarterly payment immediately before it suspended its dividend in 2020.
Despite the company’s growth story over the next few years, analysts are decidedly lukewarm about Marriott’s prospects. Of the 23 analysts who cover its stock, only seven rate it outperform or an outright buy.
While analysts might be skeptical, I’m not. Its median target price of $187 is 11% higher than where it’s currently trading. Additionally, the company raised its guidance for the year. It increased its revenue per available room worldwide to growth of 10-13% with adjusted EPS of $8.20 a share at the midpoint.
Marriott will do just fine in the second half of 2023.
On the date of publication, Will Ashworth did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.