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Many income investors focus on dividend yield when they start looking for income-generating stocks. There's an element of logic behind that -- if you're solely concerned about generating income, there's no use looking at stocks that have a minuscule payout.
At the same time, I think it's just as important to look at dividend growth. High yield is great if you're looking for immediate cash flow, but if you want to build wealth for the long term, make sure you're looking for stocks with a track record of increasing dividend payouts.
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You can find these kinds of stocks everywhere. In fact, I've assembled a list of five dividend growth stocks that have increased their dividends every year in the 21st century and beyond. Each represents a different sector in the market, proving that you can find great dividend growth stocks nearly anywhere.
Representing the information technology sector is International Business Machines (NYSE: IBM), also known as IBM. Big Blue is a true unicorn, as it's a tech company that plays an important role in the artificial intelligence (AI) build-out. IBM makes mainframe computers powered by Telium II processors and Spyre Accelerator chips for AI workloads. It also plans to launch its first large-scale fault-tolerant quantum computer by 2029.
What's notable about IBM stock right now is that it's down 25% on the year. That's because of a brutal second-quarter earnings report in which the company badly missed estimates, as customers shifted spending from IBM mainframes and other products to snap up memory and storage. Management said several deals failed to close as expected in Q2, leading to a decline in profits and earnings per share from the previous year.
I'm expecting IBM to rebound nicely when it reports third-quarter earnings on Oct. 21. In the meantime, investors can appreciate a dividend yield of 3% and a 31-year track record of increasing the dividend payout.
The industrial sector is having an OK year. Shares in the S&P 500 industrial sector are up nearly 10% so far this year, which trails the overall index, but it's nothing to feel bad about. Caterpillar (NYSE: CAT) is the outlier, jumping nearly 50% so far in 2026. I think it's got plenty more room to run.
Caterpillar is also profiting from AI growth. It makes fast-response natural gas generators that are in demand among data center operators as a reliable power source.
The company topped $20 billion in quarterly revenue in Q2 -- the first time it hit that milestone -- as sales jumped 24% from a year ago. Operating profit was $4.3 billion, up a whopping 54% on a year-over-year basis, and profits per share increased 68% to $7.77 per share.
Caterpillar has a small dividend yield of 0.8%, but that's understandable when you consider how much the stock price has increased in recent months. The dividend increases continue like clockwork; Caterpillar has bumped up its payout for 32 consecutive years.
My pick in the energy sector is ExxonMobil (NYSE: XOM), the biggest U.S.-based oil company. With a market capitalization of more than $650 billion, ExxonMobil has substantial resources to sustain consistent revenue, production, and cash flow to maintain its dividend payout.
ExxonMobil is a vertically integrated energy company, meaning it has businesses across the upstream (drilling and extraction), midstream (transportation via a network of pipelines), and downstream (marketing and sales) segments.
Revenue in Q2 was $116.02 billion, up from $81.51 billion a year ago. Net income was $14.52 billion, up from $7.09 billion in Q2 2025, and earnings of $3.48 topped the $1.64 per share that ExxonMobil posted in the same quarter last year.
ExxonMobil stock is up 36% this year, and its dividend yield is a respectable 2.5%. The oil company has increased its dividend annually for 45 consecutive years.
My pick in the healthcare sector is AbbVie (NYSE: ABBV), the maker of Humira, the popular drug used to treat inflammatory diseases. While Humira isn't the moneymaker it used to be (AbbVie lost exclusivity for the drug in 2023), it's been more than replaced by two other drugs, and the company has several more potential treatments in the pipeline.
Today, AbbVie is getting a large share of its revenue from Skyrizi (a treatment for psoriasis and Crohn's disease) and Rinvoq (a treatment for dermatitis and arthritis). AbbVie had $16.99 billion in revenue in Q2, with $5.5 billion coming from Skyrizi and $2.52 billion coming from Rinvoq.
AbbVie stock is up 15% so far this year, and its dividend yield is 2.6%. With 54 years of consecutive dividend growth, AbbVie earns the rare distinction of being a Dividend King, a title bestowed on companies with at least 50 consecutive years of dividend growth.
My consumer staples pick is also a Dividend King. Coca-Cola (NYSE: KO) has 64 years of consecutive dividend growth, the longest streak on this list. Coca-Cola is a top seller worldwide in carbonated soft drinks, juices, coffee, sports drinks, tea, water, and even some alcoholic beverages.
Revenue in Q2 was $13.38 billion, up from $12.53 billion a year ago. Bottom-line results showed great improvement, with net income of $4.42 billion and earnings per share of $1.03 per share, up from $3.81 billion and $0.88 per share.
Coca-Cola stock has enjoyed market-beating returns of 23% so far this year, and its dividend yield is 2.5%.
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Patrick Sanders has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends AbbVie, Caterpillar, and International Business Machines. The Motley Fool has a disclosure policy.
5 Stocks to Buy That Have Raised Their Dividends Every Year Since 2000 was originally published by The Motley Fool
