Buying companies with the ability to grow their dividends for years, and holding them for the long term, can result in amazing, wealth-creating returns. Even if the yields are small today, the resulting payouts years from now can be much, much bigger. 

Looking for dividend growth this month? Three of our contributing investors think you should look closely at leading utility NextEra Energy Inc (NEE 0.19%), food-maker Hormel Foods Corp (HRL 0.76%), and resurgent megabank Bank of America Corp (BAC 0.92%)

A hand holds a ruler, measuring stacks of coins growing progressively taller.

Image source: Getty Images.

A clean-energy dividend growing by double digits

Neha Chamaria (NextEra Energy): Utilities usually make for good dividend stocks, but NextEra Energy's solid foothold in the renewable-energy space makes it even more appealing. NextEra is not only one of the largest electric utilities in the U.S., but is also the world's largest generator of solar and wind energy. That aside, NextEra is also among the largest nuclear-power operators in the U.S.

Just this past May, NextEra's subsidiary, Florida Power & Light Company, announced plans to retire its third coal-fired plant, while intensifying focus on cleaner energy sources. One of its plans includes adding 2,100 megawatts of new solar capacity through 2023.

Not surprisingly, NextEra calls itself a leading "clean energy company," and this is exactly where income investors can find value as renewable energy is only going to pick up steam in coming years. NextEra already has a strong dividend history to boot, having increased its dividend every year since 2005. In 2015, the company announced target annual dividend growth of 12%-14% through at least 2018, and has kept up with its plans so far. For example, NextEra raised its dividend by 13% earlier this year.

Double-digit dividend growth is hard to come by, and NextEra also offers a decent yield of 2.8% currently. Combine that with the company's strong presence in renewable energy, and NextEra comes across as a great growing dividend stock that you can eye this month.

A rare yield

Reuben Gregg Brewer (Hormel Foods Corp): Hormel's dividend has grown each and every year for 51 years -- that's an incredible track record. Even more impressive, the annualized dividend growth rate over the past decade was just over 15%. That's roughly five times the historical growth rate of inflation, which is around 3%. Putting that a different way, Hormel's annual hikes have actually increased the purchasing power of investors, over time.

There are other companies that can make similar dividend claims (though not many). So why pick Hormel right now? The answer is the company's yield, which is around 2% today. That's roughly in line with the broader market, but it happens to be toward the high end of Hormel's historical yield range. In fact, the yield has only jumped above 2% a few times over the past 20 years or so.

HRL Dividend Yield (TTM) Chart

HRL Dividend Yield (TTM) data by YCharts.

To be fair, Hormel isn't exactly cheap. It's price-to-earnings (PE) ratio of around 21 is only a little below its five-year average of nearly 23, and it's price-to-sales ratio of two is actually above its five-year average of 1.5. It's important to note that the company is dealing with shifting consumer trends that have put a damper on some of its core products -- notably those that live in the center aisles of grocery stores.

Add it up, and Hormel is probably best described as fairly priced. But a reasonable price for a company with Hormel's dividend-growth track record is an opportunity you shouldn't pass up. I didn't... and if the price goes lower (pushing the yield even higher), I'll relish the opportunity to buy more!

BofA brings back dividend growth (and more)

Jason Hall (Bank of America Corp): For years, Bank of America's stock has traded at a pretty substantial discount to both its own book value and to the book value of its megabank peers:

BAC Price to Book Value Chart

BAC Price to Book Value data by YCharts.

More recently, however, Bank of America has delivered strong profit growth, and also moved beyond years of legal issues that kept many investors at bay. That's helped reduce the spread between the price investors have been willing to pay for BofA and its big-bank competitors, and generated big returns for shareholders over the past couple of years. 

Even with the big gains, there are still great reasons to buy today. Bank of America breezed through its Dodd-Frank Act stress tests this year, revealing that it has far more capital on its balance sheet than it needs to survive a hypothetical financial crisis. That means BofA's management will finally get to do what it's wanted to do for years: buy back a ton of stock and boost the dividend

All in all, Bank of America is going to spend $12 billion repurchasing shares -- that's nearly 5% of the current market cap -- and will increase the dividend 60%, pushing the yield to just under 2%. Even after these actions, Bank of America's balance sheet will remain very strong, and a solid economy and increasing interest rates could support further dividend growth in coming years. And with BofA still only trading for around its book value, it remains one of the cheapest big banks to buy.