Dividend stocks can make for great investments as they can be excellent sources of recurring income for your portfolio. And with dividend growth stocks, there's also a strong possibility that the income you receive will increase over the years.

Two companies that have been increasing their payouts for decades and recently announced dividend rate hikes are Medtronic (MDT 0.01%) and Lowe's Companies (LOW 0.53%). Here's a closer look at these businesses and why there could be more rate hikes from them in the future.

1. Medtronic

Medical device maker Medtronic operates in over 150 countries, and patients rely on its products to help with over 70 different conditions. The strength and diversity of its operations have allowed Medtronic to generate strong financials, which have enabled the company to also offer investors an attractive dividend.

On May 25, Medtronic released its full-year results for fiscal 2023 (ended on April 28), which showed revenue of $31.2 billion, up 2.1% on an organic basis, excluding the impact of foreign exchange. And for the last quarter of the year, the business was trending even better, with sales during that stretch totaling $8.5 billion and increasing 5.6% year over year.

For fiscal 2024, the company anticipates organic revenue growth of up to 4.5%. CFO Karen Parkhill stated, "We're encouraged by the procedure recovery we are seeing in many of our markets, our product availability is improving, we like our competitive positions across our businesses, and we have many new, innovative products coming to the market."

Given the continued strong results, the company's board of directors approved a dividend increase. The stock will now pay investors $0.69 per share, which is $0.01 higher than the $0.68 it was previously paying.

With the increase, Medtronic's dividend streak has now reached 46 consecutive years. And while this most recent rate hike was a modest increase of just 1.5%, the company notes that in five years, the dividend has risen by 38%. Over the past 46 years, it has averaged a compound annual growth rate of 16%.

Although its payout ratio is close to 100%, Medtronic says it is making efforts to reduce costs across the business, and with continued growth, the dividend still looks to be in good shape to increase in the years ahead. Its free cash flow for last fiscal also came in at just under $4.6 billion -- comfortably more than the $3.6 billion it paid out in dividends.

At 3.3%, Medtronic's dividend yield is close to double the S&P 500 average of around 1.7%. For investors who crave a growing dividend, Medtronic can be a solid investment to buy and hold.

2. Lowe's

Lowe's is one of the top home improvement retailers in the world. It has an estimated 19 million customer transactions every week, and revenue topped $97 billion last year.

On the company's most recent earnings report, for the period ended May 5, net sales of $22.3 billion fell by 5.5% from the prior-year period. Lowe's blames the decline on multiple factors, including lumber deflation, unfavorable weather, and lower overall demand as customers scale back spending amid rising costs and challenging economic conditions.

While Lowe's is anticipating more softness ahead, management remains optimistic about the medium and long term. And what makes investing in the home improvement retailer attractive is that repairs and maintenance are necessary expenses for homeowners. While they can be delayed, they oftentimes can't be avoided entirely, which means demand should recover. This year, the company is projecting its comparable-sales growth will be down by as little as 2% and as much as 4%.

In a testament to the company's confidence in the longer-term outlook, Lowe's still announced an increase to its dividend just a few days after releasing the results. The company has declared a quarterly cash dividend of $1.10 per share, which represents a 5% increase in the payout. It has also increased its dividend payments for nearly 50 years, and next year it could become a Dividend King. Lowe's has a payout ratio of just over 40%, so it's likely that even with a bit of a slowdown this year, the dividend will continue to go up.

Like Medtronic, Lowe's can be another good dividend stock to buy and hold for the long term. At 2.2%, its yield is also better than the S&P 500 average.