Top 10 dividend growth stocks in May 2025 ranked by biggest increases. Includes CW, NOC, WMS, and more.
Dividends
June 7, 2025
Table of Contents
May 2025 saw several companies across sectors boosting their dividend payouts—clear signs of financial strength, stable earnings, and shareholder-focused strategies. This month’s Top 10 list includes only those companies that increased their dividends by at least 10%, ranked from the lowest to the highest percentage.
A dividend increase is when a company raises the cash payout it distributes to shareholders. This often signals strong performance, confident earnings forecasts, and long-term value creation. These changes are typically declared during quarterly earnings or board meetings.
Raising dividends helps retain long-term investors, improves yield attractiveness, and shows confidence from management in future cash flow. It’s a classic sign of shareholder-friendly capital allocation.
Innospec declared a semi-annual dividend of $0.84 per share, a 10% increase. The fuel and specialty chemicals company is returning more capital to shareholders as profitability climbs. Innospec reported balanced first-quarter 2025 results, with strong growth in its Fuel Specialties segment offsetting lower results in Performance Chemicals and Oilfield Services. The company generated $28.3 million in cash from operations and improved its net cash position to $299.8 million.
Share Price: $86
Dividend Yield: 1.89%
Donaldson, a global filtration technology company, raised its quarterly dividend by 11.1%. This marks its 28th consecutive annual increase, driven by strong demand across industrial and aftermarket segments. The company also introduced the scale-X™ Nitro Controller, a breakthrough in biopharmaceutical filtration, demonstrating its commitment to innovation and sustainable growth.
Share Price: $70
Dividend Yield: 1.71%
Northrop Grumman increased its quarterly dividend to $2.31 per share, up 12% from last year. The defense contractor’s growing backlog and defense contracts continue to support rising free cash flow. Northrop Grumman secured a $188.6 million contract modification to support the MQ-4C Triton unmanned aircraft system for the U.S. Navy and Royal Australian Air Force.
Share Price: $489
Dividend Yield: 1.89%
ADS increased its annual dividend to $0.72 per share, reflecting a 13% gain over the prior year. Strong cash flow from stormwater and water management product sales supports the move. The company maintained a strong 30.6% adjusted EBITDA margin despite challenges in the domestic construction market. Notably, ADS's Infiltrator and Allied Products segments, which account for 44% of revenue, showed organic growth of 4.6% and 2.5%, respectively.
Share Price: $114
Dividend Yield: 0.63%
Nicolet boosted its quarterly payout to $0.32 per share, a 14% jump over the previous quarter. The regional bank continues to report stable margins despite interest rate pressure. The bank also authorized a $60 million share repurchase program, reflecting its solid financial position and commitment to enhancing shareholder value.
Share Price: $118
Dividend Yield: 1.08%
Curtiss-Wright raised its quarterly dividend to $0.24 per share—a 14% increase. The defense and industrial tech firm has benefited from sustained demand in aerospace, naval, and nuclear programs. Additionally, the company was selected by Pro Optica to provide turret drive stabilization technology for Romania's ANUBIS 3.0 remote-controlled weapons station.
Share Price: $452
Dividend Yield: 0.21%
Katahdin, a Maine-based community bank, announced a 15.7% increase in its second-quarter dividend. The rise reflects steady loan growth and disciplined expense control.
Share Price: $25
Dividend Yield: 3.27%
Kimbell Royalty Partners raised its Q1 distribution by 18% to $0.47 per unit. With a yield of over 15%, the firm benefits from strong royalty payments tied to oil and gas production. Kimbell Royalty Partners announced record first-quarter 2025 results, driven by a $231 million acquisition of mineral and royalty interests in the Midland Basin. This acquisition includes 875 gross producing wells over 68,000 acres, with operators such as Diamondback Energy, ConocoPhillips, and ExxonMobil. The deal is expected to increase Kimbell's daily production by 8% and generate an estimated $30.9 million in cash flow for 2025.
Share Price: $13
Dividend Yield: 12.96%
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When a company increases dividends, it’s raising the amount of money it pays out to shareholders per share. This can happen when the company’s profits and cash flow are strong, enabling it to reward investors with a larger payout. Dividend increases are often seen as a sign of a company’s financial health and long-term stability.
To generate $1,000 a month (or $12,000 annually) in dividends, you’ll need to consider the dividend yield of your portfolio. For example, if your portfolio’s average yield is 4%, you would need to invest $300,000. At a 5% yield, you’d need $240,000. The higher the yield, the less capital required, but higher yields often come with more risk.
A rising dividend yield can be positive, as it shows leadership is so optimistic about cash flows they can literally give away money. However, a yield increase due to a falling stock price can be a bad sign. Looking at the reason behind the higher yield is critical as a yield increase due to financial distress is not.
You buy a stock for $100/share. That company pays you a dividend yield of 5%. This means every year the company will pay you $5 just to own the stock, in 4 quarterly payments. If you bought 1,000 shares for $100,000, you’d be earnings $5,000 per year in passive income.
Earning $5,000 a month in dividends (or $60,000 annually) depends on your portfolio’s dividend yield. At a 4% yield, you’d need $1.5 million invested. At a 5% yield, you’d need $1.2 million. As with any income strategy, diversification and stability of the underlying companies are key.
Dividends aren’t exactly “free money.” They represent the return on your investment in the company based on your ownership of that company’s profits.
High-yielding stocks can be found in industries like real estate investment trusts (REITs), utilities, and energy. However, the highest-yielding stocks are not always the best choice as abnormally high yields may signal underlying issues that have caused the share price to drop substantially. In these cases, the company is likely to cut the dividend yield to save money.
In many countries, dividends are considered taxable income. The tax rate depends on factors such as the dividend type (qualified or ordinary) and your tax bracket. In some cases, tax-advantaged accounts like IRAs or 401(k)s can help defer or eliminate dividend taxes.
Dividend-paying stocks may offer steady income, but they aren’t risk-free. Companies can reduce or eliminate dividends during tough economic times, causing stock prices to fall. Additionally, focusing only on dividends may limit exposure to high-growth companies that reinvest earnings rather than paying them out.
The amount of tax-free dividend income depends on local tax laws. In some jurisdictions, qualified dividends or dividends held within tax-advantaged accounts may not be taxed at all. In other cases, dividends up to a certain threshold are taxed at a reduced rate or not taxed.
While many companies pay dividends quarterly, some pay monthly. Monthly dividend stocks can be attractive for investors seeking consistent cash flow, but the frequency of payment doesn’t necessarily indicate the quality of the dividend. Some ETFs, like BITO, pay a monthly dividend.
To minimize or avoid taxes on dividends, you might consider holding dividend-paying stocks in tax-advantaged accounts (like IRAs in the U.S.), investing in tax-free municipal bond funds, or focusing on qualified dividends, which often have lower tax rates than ordinary income.
For investors, a dividend increase often suggests that the company is financially sound and committed to returning value to its shareholders. It can also enhance the total return on investment, providing both capital appreciation (if the stock price rises) and growing income over time. Dividend growth investors, in particular, seek out companies that regularly increase their dividends as a sign of long-term stability and growth potential.
While not guaranteed, a dividend increase can lead to positive market sentiment. Investors may view the increase as a sign of company strength, driving demand for the stock and potentially boosting its price. Over the long term, consistently rising dividends can contribute to higher overall returns and attract income-focused investors.
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