Income investors seeking stocks with stable dividends should focus on companies with a proven track record of dividend increases. Investors can generate rising dividends from stocks that have established track records of growing their dividends year after year, even during recessions.
Blue-chip stocks are established, financially strong, and consistently profitable publicly traded companies. Their strength makes them appealing investments for comparatively safe and reliable dividends and capital appreciation, versus less established stocks.
We define blue-chip stocks as those with at least 10 consecutive annual dividend increases. These three blue-chip stocks have reliable dividends and steady dividend growth.
1. Target Corporation
Target Corporation (NYSE:) is a general merchandise retailer that operates in the US. The company offers a vast assortment of food products, including dry groceries, dairy, frozen items, and perishables. Additionally, Target operates a large apparel business, featuring many of its private labels. The company offers a wide range of electronics, toys, animal care products, home décor, and more.
Target posted first-quarter earnings on May 21st, 2025, and results were quite weak once again. Earnings came to $1.30 per share, which missed estimates by 35 cents. Revenue was also 3% lower from the prior year at $23.8 billion, missing estimates by $550 million. Merchandise sales were off 3.1% year-over-year, partially offset by a 13.5% increase in other revenue.
Digital comparable sales were up 4.7%, with same-day delivery growth of 35%. Strength in Drive Up continues to drive those results. Operating margin was 6.2% of revenue, up from 5.3% a year ago.
Target’s competitive advantage comes from its everyday low prices on attractive merchandise in its guest-friendly stores. The company is not immune to recessions. In 2008, its earnings per share fell by 14%. Nevertheless, that performance was much better than that of most companies, which saw their earnings collapse during the Great Recession. Moreover, it took only one year for Target’s earnings to return to their pre-crisis level.
Therefore, while Target is vulnerable to economic downturns, it is much more resilient than most stocks in such periods. Target is combating this in part with its massive push towards digital sales channels.
Target’s current yield of 4.4% compares quite favorably to the 1.3% yield of the . Target has raised its dividend for an impressive 56 consecutive years, placing it in rare company on that measure. The payout ratio is now 61% of earnings for this year, indicating a secure payout.
2. Black Hills
Black Hills (NYSE:) is an electric utility that provides electricity and/or to customers in Arkansas, Colorado, Iowa, Kansas, Montana, Nebraska, South Dakota, and Wyoming. Black Hills was founded in 1941, and the company is headquartered in Rapid City, South Dakota.
Black Hills Corp. reported its first-quarter earnings results in May. The company generated revenue of $805 million during the quarter, representing an 11% increase from the same quarter last year. Black Hills Corp. generated earnings per share of $1.87 during the first quarter, which was flat on a year-over-year basis. Q4 and Q1 are typically stronger quarters due to higher natural gas demand for heating, as evidenced by the above-average profitability during the most recent quarter.
Black Hills Corp. forecasts earnings-per-share of $4.00 to $4.20 for the current Fiscal Year. Current guidance implies that earnings per share will hit a new record high this year.
As a utility, Black Hills enjoys a recession-proof business model, as people will always need electricity and gas. Today, the company pays out roughly two-thirds of its net profits in the form of dividends. Its decades-long dividend growth track record assures investors that a dividend cut is unlikely from this utility company. The fact that customers tend to stick with their provider means that Black Hills operates a relatively stable business model. The company should also be able to weather future recessions reasonably well, which creates appeal for more conservative investors.
On average, earnings per share grew by 3% to 4% annually over the past 10 years, which is a solid growth rate for a utility. Black Hills’ growth over the coming years depends on several factors. This includes rate reviews, which drive revenue and profits per kilowatt hour. Rate reviews will enable Black Hills to recover investments in its existing systems, thereby more or less guaranteeing increased revenue over time.
Black Hills Corporation has increased its dividend for 55 consecutive years, which makes it a Dividend King.
3. Lowe’s Companies
Lowe’s Companies (NYSE:) is the second-largest home improvement retailer in the U.S., behind Home Depot (NYSE:). Founded in 1946 and headquartered in Mooresville, North Carolina, the company has a market cap over $120 billion. As of January-end, Lowe’s operated 1,748 home improvement and outlet stores across the U.S., covering about 195 million square feet of retail selling space.
Lowe’s reported first-quarter 2025 results on May 21st, 2025. Total sales came in at $20.9 billion compared to $21.4 billion in the same quarter a year ago. Comparable sales decreased by 1.7%, while net earnings-per-share (EPS) of $2.92 compared to $3.06 in the first quarter of 2024. Lowe’s was negatively impacted by unfavorable weather, partly offset by mid-single-digit comparable sales growth in Pro and online channels.
The company repurchased $112 million of common stock in the quarter. Additionally, it paid out $645 million in dividends. Lowe’s reiterated its Fiscal 2025 outlook and still expects to earn diluted EPS of $12.15 to $12.40 on total sales of $83.5 to $84.5 billion.
Acquisitions are a potential catalyst for Lowe’s growth. On June 2nd, 2025, Lowe’s announced it had closed on the previously announced acquisition of Artisan Design Group (ADG) for $1.325 billion. ADG is a major provider of interior surface design and installation services, such as flooring, cabinets, and countertops, serving homebuilders and property managers across the U.S. It registered $1.8 billion in revenue last year and has a network of over 3,200 installers. The move expands Lowe’s Pro business into a $50 billion market.
Lowe’s has delivered strong EPS growth, with a 15.7% CAGR from 2015 to 2024 and 16.3% over the past five years. Sales growth, margin gains, and share buybacks powered this. We expect EPS growth of around 9% annually over the next five years.
This growth will allow the company to continue raising its dividend, as it has for many years. On May 30th, 2025, Lowe’s increased its quarterly dividend by 4.3%, from $1.15 per share to $1.20 per share. This marked the 62nd consecutive year of increasing dividends for the company.
Lowe’s is a Dividend King; the company has raised its dividend annually for 62 consecutive years, even during recessions, the Great Financial Crisis, and the COVID-19 pandemic. This powerful track record, coupled with the fact that Lowe’s dividend payout ratio is relatively low at 39% for 2025, shows that Lowe’s is a reliable and low-risk dividend stock where investors do not have to worry about a dividend cut. Additionally, the company is likely to experience many years of dividend growth.
Disclosure: No positions in any stocks mentioned
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