If you value dividend income, then you know how desirable a high-yielding dividend stock can be. The S&P 500 averages a payout of less than 1.4%, which isn't all that great.

A couple of income-generating investments that pay higher than that include Medtronic (MDT 0.92%) and Lowe's (LOW -2.06%). Not only do these stocks pay more than 2% per year, but they recently hiked their payouts significantly. These are precisely the types of stocks income investors should target for their portfolios. Here's why.

1. Medtronic

Medtronic is an Ireland-based medical device company with a presence in 150-plus countries, and it possesses more than 49,000 patents. The company say its products help treat over 70 different health conditions. For investors, that can mean a stable, diverse long-term investment.

The company reported its year-end results last month. Sales for the fiscal year ended April 29 totaled $31.7 billion and rose by 5.2%. And Medtronic issued guidance that called for another 4% to 5% in organic revenue growth for the new fiscal year.

In light of the strong and stable numbers, the healthcare company also announced that it would be increasing its dividend payments by 8%. Annually, investors will receive $2.72 per share, up from $2.52 previously. It is the 45th straight year that Medtronic has raised its dividend payments.

At a little over 2.9%, Medtronic pays more than double what you'd get in dividends from the average S&P 500 stock. Plus, the company's strong track record in paying and increasing its payouts means there's an excellent chance that your dividend income will increase over time as you hang on to the stock.

Although shares of the stock are down more than 14% in 2022, Medtronic has still outperformed the S&P 500, which is down by 20%.

2. Lowe's

North Carolina-based Lowe's is a home improvement company that has close to 2,200 stores in North America -- mainly in the U.S. Founded over 100 years ago, the brand has a strong history and has become a go-to location for consumers who are making repairs or upgrades to their homes.

Like Medtronic, the business released its latest round of earnings numbers in May. For Lowe's, it was the company's first-quarter results, which also went up to the end of April 29. At $23.7 billion, sales were down nearly 3% from the prior-year period.

For the current year, the company isn't expecting much growth with comparable sales projected to increase by no more than 1% (and at worst, they could be down by 1%). But that's not terrible, given how much the business has grown over the past few years due to the pandemic and a hot housing market.

For the fiscal year ended Jan. 28, the company's top line totaled $96.3 billion and grew by 7.4% from the previous year, when revenue was just under $90 billion. And when compared to two years ago, when sales topped $72.1 billion, the company's revenue has increased 33% since then.

The business has been booming, so even with a slowdown, management felt confident in boosting its dividend payment after the recent results. Lowe's increased its dividend payment by an incredible 31%, from $0.80 to $1.05. Dividend increases are the norm for the company as Lowe's has been raising its payouts for more than 50 years in a row; it is a Dividend King.

Even with the boost in the dividend, the stock's payout ratio is still modest at less than 30%. Its 2.3% yield isn't terribly high today, but future rate hikes will ensure you're making even more on your original investment over the years.

Although shares of Lowe's are down 28% year to date, likely due to its uninspiring guidance and expectations this year, it still makes for a solid dividend stock to own for the long haul.