3 High-Yielding Dividend Growth Stocks That Have Increased Their Payouts by 50% in 5 Years

If you're investing in a dividend stock, there's more than just the yield and the payout ratio to consider. It's also important to look at dividend increases -- whether the company has been making them in the past and is likely to continue doing so in the future. That's because if dividend payments grow, you'll be collecting more income over the years -- and that can help to offset the impact of inflation.

Three great dividend growth stocks to consider owning right now are AbbVie (ABBV -4.58%), McDonald's (MCD -0.91%), and Comcast (CMCSA 1.85%).

1. AbbVie

Drugmaker AbbVie pays a relatively high dividend, which today yields around 4% annually. That's more than double the S&P 500 average of 1.6%. When including its time as a part of Abbott Laboratories (AbbVie spun off in 2013), it's technically a Dividend King, having increased its dividend payments for 50-plus years.

Currently, it pays a quarterly dividend of $1.48. That's 54% higher than the $0.96 payment the company was making five years ago. 

Over the trailing 12 months, AbbVie has generated free cash flow of $24.8 billion, which is easily more than enough to cover the $10.3 billion it has paid in dividends during that time frame, suggesting that the current dividend is safe and there's room for more dividend hikes in the future.

The company behind top-selling drug Humira makes for a solid long-term buy. With a broad business that includes eye care products, neuroscience, aesthetics (it owns Botox), and some fast-growing immunology drugs in Skyrizi and Rinvoq,

AbbVie stock makes for a potential steal of a deal for income investors as it's trading at only 14 times its estimated future earnings -- the healthcare average is a multiple of over 18.

2. McDonald's

Investors can collect another above-average yield from restaurant stock McDonald's. At 2.3%, it's not as high of a payout as AbbVie, but it's also a fantastic income investment; McDonald's has increased its dividend payments for 46 straight years, and another hike could be coming this next month to push that streak even further.

Last year, it made a generous 10% increase to its dividend. Over the span of five years, the dividend has increased by just over 50%. McDonald's also has a fairly reasonable and manageable payout ratio at 55% of earnings, which makes it probable that it continues its streak.

The company has demonstrated some impressive resiliency and pricing power amid inflation. When it last reported earnings in July, it said that its comparable-store sales grew by 11.7% for the period ended June 30. The company reported double-digit growth in all of its segments.

For long-term investors, McDonald's is one of the few true buy-and-forget stocks you can hold on to and not worry about. Its strong brand, high yield, and impressive financials are plenty of reasons to hang on to this stock for years. And at 21 times estimated future profits, its valuation isn't overly expensive -- the S&P 500 averages a forward price-to-earnings multiple of 19. McDonald's is arguably worth a premium, given its strong fundamentals.

3. Comcast

Comcast is a top telecom, media, and entertainment company in the country, and it also pays a great dividend, which yields 2.6%. In January, the company reported its year-end results for 2022, and at the time it announced that it would also be increasing its dividend for a 15th consecutive year. In five years, Comcast has increased its quarterly dividend from $0.19 to $0.29, which is a jump of 53%. Its payout ratio is at 70% of earnings, which isn't terribly high and could leave room for more rate hikes in the years ahead.

This is another example of a solid, robust business for investors to consider adding to their portfolios. Over the first six months of the year, Comcast's revenue has been relatively stable at $60.2 billion, declining by just 1% from the same period last year. And its operating income of $12.4 billion is actually 4% higher than the $11.9 billion it reported a year ago.

The company's theme parks are doing well, subscriptions for its Peacock streaming services have nearly doubled to 24 million, and its Super Mario Bros. movie has been one of the highest-grossing animated movies of all time.

Trading at less than 11 times its estimated future earnings, this is another relatively cheap stock to own right now that dividend investors should consider adding to their portfolios.