13 Elite Companies With Fast-Growing Dividends

Morningstar's DividendInvestor newsletter identified 13 companies, including Accenture, Elevance Health, MSCI, SBAC Communications, and Zoetis, that have increased their dividend payout by at least 10% for five consecutive years while maintaining a wide or narrow economic moat and a current yield of at least 1%. Companies like Analog Devices, Goldman Sachs, and Home Depot failed to make the list due to not meeting the 10% dividend increase hurdle, while others like Kroger were removed due to moat rating downgrades; currently, Morningstar analysts consider Mondelēz International, SBA Communications, SS&C, Elevance Health, and UnitedHealth undervalued, though UnitedHealth's dividend growth outlook is uncertain.

Analysis

Morningstar's DividendInvestor newsletter has identified a select group of 13 companies demonstrating robust dividend growth, defined by at least a 10% annualized increase in per-share dividend payouts for five consecutive years (2020-2024), coupled with a Morningstar economic moat rating (wide or narrow), low or medium uncertainty, and a current yield of at least 1%. This rigorous screening process, limited to Morningstar's analyst coverage, yielded prominent names such as Mondelēz International (MDLZ), Accenture (ACN), Elevance Health (ELV), and UnitedHealth (UNH), alongside newcomers like MSCI (MSCI) and Zoetis (ZTS). Notably, several companies including Analog Devices (ADI) and Home Depot (HD) failed to meet the 10% dividend growth threshold, while Kroger (KR) was excluded due to a moat downgrade, and American Tower (AMT) due to a dividend cut in 2024 (though since restored). The average dividend yield for this elite group is a modest 1.8%, reflecting that rapid dividend growers often reinvest significantly, allowing more room for sustained increases compared to higher-yielding firms, a characteristic that often signals strong underlying earnings growth attractive for long-term investors. Morningstar analysts currently identify five of these growers as undervalued: Mondelēz International (MDLZ), SBA Communications (SBAC), SS&C Technologies (SSNC), Elevance Health (ELV), trading at over a 30% discount to fair value, and UnitedHealth (UNH). However, UnitedHealth warrants caution, as analysts project flat dividend growth for the next two years due to controversies and earnings uncertainty, making its continued presence on future lists improbable. The strong correlation between economic moat ratings and dividend sustainability, particularly during economic stress, underscores the qualitative strength sought by this screening methodology.

Key Decisions for Investors

• Investors should evaluate the identified dividend growth companies, particularly Mondelēz (MDLZ), SBA Communications (SBAC), SS&C (SSNC), and Elevance Health (ELV), which are currently considered undervalued by Morningstar, as potential additions for long-term growth portfolios.
• Exercise significant caution with UnitedHealth (UNH); despite its historical performance and current valuation, its projected flat dividend growth due to ongoing issues makes its continued status as a rapid dividend grower unlikely.
• Beyond this list, prioritize companies with strong economic moats and favorable valuations relative to intrinsic value to enhance the probability of sustained dividend growth and capital appreciation, while acknowledging that consistent double-digit dividend growth is a high hurdle requiring ongoing monitoring.