Income investors are drawn to dividend stocks for their steady stream of income. But dividend stocks are appealing for another reason: They tend to outperform non-dividend payers over long time periods. According to a Hartford Funds study, over a 50-year period, dividend payers returned an average of 9.2% annually, significantly outperforming non-dividend payers, which returned 4.3% annually.
The best dividend stocks demonstrate strong business performance across economic cycles and maintain prudent balance sheet management, enabling them to consistently pay dividends to investors. Industrial stocks can be an excellent place to look. With the stock market off to a slow start in 2026, here are three dividend-growing stocks to buy right now.
Image source: Getty Images.
General Dynamics' long-term contracts provide a steady stream of cash flow
General Dynamics (GD +0.42%) has increased its dividend payout for 35 consecutive years, a period that spans three recessions. What makes it a reliable dividend payer is its diversified business, which offers multiple levers for generating cash flow.
The company's largest segment is marine systems, where it builds nuclear-powered submarines and auxiliary ships for the U.S. Navy. Because shipbuilding contracts span decades, this provides it with long-term visibility into future revenue. On top of that, General Dynamics also owns Gulfstream, a leader in the premium business jet market. This business helps it capitalize on the growth of private sector wealth while also providing diversification from its government-dependent defense business.
NYSE: GD
Key Data Points
The company benefits from growing defense spending and has secured several major contract wins. In March, it was awarded a Navy contract modification valued at $15.38 billion for the design, support, and sustainment of Columbia-class ballistic submarines. It was also recently awarded a contract for Virginia-class submarines, valued at up to $2.49 billion if all options are exercised.
General Dynamics has visibility into future earnings, which helps support its growing dividend. In March, the company increased its quarterly dividend payment 6% to $1.59 per share. Its position in defense provides it with a strong economic moat, making it an excellent dividend stock to invest in today.
Rising defense budgets should benefit Lockheed Martin
Lockheed Martin (LMT 1.05%) is another defense-focused company with a 2.2% dividend yield and a 23-year history of dividend increases. The company is a top defense contractor that should benefit from rising defense spending. In 2026, the United States approved $1 trillion in defense spending, and projections suggest that could rise to $1.5 trillion in 2027.
NYSE: LMT
Key Data Points
Lockheed is a lead contractor on the F-35 fighter jets, and the sale and maintenance of them provides it with a steady stream of revenue that can span decades. The company also integrates space systems, hypersonic missiles, and advanced electronic warfare, making it a top defense contractor for the government.
In March, it signed a framework agreement with the Department of War (formerly Department of Defense) to quadruple the production capacity of the Precision Strike Missile in response to Operation Epic Fury in Iran, building on its $4.94 billion contract last year. As a top defense contractor, Lockheed has a steady backlog of work, giving it visibility into future earnings, which should support its growing dividend for years to come.
Illinois Tool Works' expertise provides a strong competitive moat
When it comes to longtime dividend payers, Illinois Tool Works (ITW 0.09%) has a long track record of rewarding investors. For 62 years, the company has raised its payout, and it is a member of the exclusive Dividend Kings club.
NYSE: ITW
Key Data Points
Illinois Tool Works does an excellent job of leveraging its highest-margin cash flow businesses to support its growing payout over time. The company offers products across several segments, including automotive, food equipment, and construction. Its automotive OEM segment is one of its largest, where it provides components such as fuel systems, braking components, and powertrain technology.
The company also provides specialized engineering solutions to help customers solve complex problems. Rather than just selling products from a catalog, Illinois Tool Works leverages its expertise to help customers overcome manufacturing hurdles, providing specialized solutions that give it a strong competitive moat. For investors searching for stability and growth, Illinois Tool Works is another solid dividend stock to scoop up today.
