3 Dividend Champions That Could Double Their Dividends From Here

Three Dividend Aristocrats and Kings—Lowe's (LOW), A. O. Smith (AOS), and Automatic Data Processing (ADP)—are highlighted for their consistent, inflation-beating dividend growth, distinguishing them from peers with meager increases. Lowe's, a Dividend King with over 60 years of hikes, recently increased its payout by 4% and has doubled it since 2021, supported by strategic acquisitions and strong growth forecasts. A. O. Smith, with 30+ years of increases, delivered 6% hikes in 2024/2025, maintains a low payout ratio, and actively repurchases shares, raising EPS guidance despite tariff challenges. ADP, also a Dividend King with 50 years of growth, recently announced a 10% increase, boasts 9.8% earnings growth, and consistently executes share buybacks, positioning these companies for continued robust dividend performance.

Analysis

Lowe's (LOW), A. O. Smith (AOS), and Automatic Data Processing (ADP) are distinguished Dividend Aristocrats and Kings, recognized for consistent, inflation-beating dividend growth over 30 to 60+ years. Their robust capital return policies highlight strong business fundamentals and commitment to shareholder value.

Lowe's, a Dividend King, delivered a 4% dividend hike in 2025, outpacing inflation, and has doubled its payout since 2021 against 18% inflation. Strategic acquisitions exceeding $10 billion and an 8% growth forecast, despite analysts historically underestimating earnings, support future dividend growth.

A. O. Smith provided 6% inflation-beating hikes in 2024 and 2025, supported by a low 37% payout ratio and $251 million in H1 2025 share buybacks. The company also raised 2025 EPS guidance by 2%, absorbing projected 15% steel price increases, demonstrating operational resilience.

Automatic Data Processing, another Dividend King, recently announced a 10% payout increase, significantly exceeding 3% inflation. Its 60% payout ratio, combined with 9.8% earnings growth and consistent share repurchases, bolsters dividend sustainability.

Key Decisions for Investors

• Investors seeking reliable, inflation-beating income and potential capital appreciation should evaluate Lowe's, A. O. Smith, and Automatic Data Processing for their portfolios.
• Consider the long-term dividend growth track records and robust capital return programs, including share buybacks, as indicators of financial health and management commitment to shareholder value.
• Monitor A. O. Smith's ability to manage cost pressures from tariffs and steel prices, and assess ADP's payout ratio in conjunction with its earnings growth for sustained dividend increases.