Don't underestimate a small dividend payout. A growing company may allocate only a small amount of excess cash to reward shareholders, but as it expands over time and profit margins grow, the dividend payment can add up to exponential growth. What was originally a small but insignificant payout can turn into a small windfall every quarter for shareholders over time. Three companies that should continue to grow their dividends for years to come are Microsoft (MSFT -0.32%), Universal Display (OLED -8.15%), and Comcast (CMCSA -0.02%). Here's why three contributors think they're worth your attention.

FAANG-like profit growth but with a higher dividend

Billy Duberstein (Microsoft): It's a bit confusing that Microsoft sold off after its recent earnings report, given the blowout results it posted, but that only opens up another buying opportunity for one of the best dividend growth stocks in the market.

Microsoft's dividend only yields 0.9%, but that's higher than Apple's (NASDAQ: AAPL) and the other non-dividend-paying FAANG stocks. Meanwhile, you still get FAANG-like growth and profitability. And that dividend is almost certain to grow for years and years.

Dividends flow from earnings, and one would be hard-pressed to find another large company with a better combination of growth and high margins than Microsoft. Since Microsoft pivoted in earnest to the cloud under CEO Satya Nadella, who took the role in 2014, revenue has been on a steady upward trajectory, as has the company's operating margin.

MSFT Revenue (TTM) Chart

Data by YCharts

With dividends only making up 29% of current earnings, and earnings per share growing a stunning 39% last quarter, one can imagine Microsoft's dividend growing by leaps and bounds over the next decade. I also happen to think Microsoft could expand its margins by more than people might think.

Thanks to both organic investments in its Azure cloud infrastructure, where it currently holds a strong No. 2 market share, along with inorganic acquisitions of high-margin platforms like LinkedIn in 2016 and more recently Nuance Communications (NUAN), Microsoft should be able to grow its earnings per share handsomely through the 2020s and beyond.

Not only are these new products contributing, but even older products are finding new life. Microsoft's Xbox video game platform just released its first new console in seven years, and even the Windows operating system is finding new life as work-from-home trends rejuvenate spending on PCs and laptops.

Microsoft is firing on all cylinders, and since the stock has pulled back slightly even after strong earnings, dividend growth investors shouldn't hesitate to take or add to a position.

A couple in a store looking at TVs.

Image source: Getty Images.

A small but explosive dividend check

Anders Bylund (Universal Display): Screen and lighting technology developer Universal Display may not look like much of a dividend stock, given its modest 0.4% yield. But then you dig a little bit deeper and find that the company actually is deeply committed to shareholder-friendly dividend growth over time.

Here's what Universal Display's dividend policy looks like:

OLED Chart

OLED data by YCharts

The stock has gained 160% since the dividend policy was started in the spring of 2017. Over the same period, the quarterly payouts increased from $0.03 to $0.20 per share. The company is spending about $9.5 million per quarter on dividend checks, which is less than half of Universal Display's free cash flows.

If you bought Universal Display shares on the day of the first dividend announcement, you may have chuckled over the minuscule yield of 0.2% at the time. But the effective yield on those shares stands at a far more impressive 1.2% today, comparable to the yields of technology giants Oracle (NYSE: ORCL) or Ericsson (NASDAQ: ERIC). Universal Display's proven commitment to regular dividend boosts is making the stock a serious income investment already, and the company is just getting started.

Better internet, mobility, and a rebound in entertainment

Nicholas Rossolillo (Comcast): This stock pick isn't going to win lots of adoring fans. Many consumers simply know Comcast as their pesky internet service provider, and because building out internet service infrastructure is an expensive ordeal, there are few alternatives to what Comcast offers. But say what you will about the communication conglomerate's customer service (it certainly could use some help), the business itself is well run overall and highly profitable. 

In fact, Comcast's core high-speed internet segment grew last year as many people signed up or upgraded their service after getting stuck at home -- more than offsetting cable TV subscriber losses. A nascent mobile phone service -- Comcast currently piggybacks off of Verizon's (NYSE: VZ) network -- also expanded. Its expansion in these key areas continued in the first quarter of 2021. Total broadband customers increased to 31.0 million at the end of March compared to 29.1 million at the end of March 2020. Wireless subscribers were another standout line item, increasing to 3.10 million versus 2.27 million last year.  

As a result, total revenue and free cash flow (from which a sustainable dividend is paid) increased a respective 2.2% (to $27.2 billion) and 59% (to $5.28 billion) year over year in Q1. All of this despite the NBCUniversal entertainment segment declining again due to ongoing effects of movie theater and theme park closures. As those businesses start to make a comeback through this year and beyond, Comcast is set for more gradual revenue growth and even more dramatic free cash flow upside.  

Comcast's dividend currently yields only 1.8% a year as of this writing (which includes a 9% raise from a few months ago). However, it's been raising its payout for years (the quarterly payday is up over 340% adjusted for stock splits over the last decade). And the payment ate up just 18% of Comcast's free cash flow generated in the last quarter. There's plenty of room for this multimedia outfit to continue growing its return of cash to shareholders for years to come.