These 10 Dividend Growing Stocks Are Crushing Social Security’s 8.7% Cost Of Living Adjustment

Social security recipients are getting some relief from rising inflation next year with an 8.7% raise to their monthly payments, the Social Security Administration announced Thursday. It’s the largest cost-of-living adjustment since 1981, but if you are an investor looking for stocks whose dividends are growing at an even faster rate than 8.7% per year, Forbes found more than 50 with market capitalizations over $1 billion that fit the bill. 

Investors in San Jose-based chipmaker Broadcom AVGO are receiving $16.40 per share in annual dividends, up from just 56 cents per share 10 years ago. That 2,800% cumulative increase represents 40% compounded annual growth during that span. Broadcom’s sterling 1,200% stock returns in the last decade explain a portion of its increasing generosity in paying dividends, though it has hiked its payouts at an even faster rate than its market value’s appreciation. Its 3.8% dividend yield now is more than double its 1.7% yield 10 years ago.

No public company in the U.S. has raised its dividend by nearly as much as Broadcom in the last 10 years, but many have been more generous than Uncle Sam. Including next year’s 8.7% increase, retirees have still only banked a 2.55% annual compounded increase in the last 10 social security cost-of-living adjustments, good for a 28.6% cumulative gain. Imagine your social security COLA wasn’t just 8.7% this year, but every year for the last 10. That means if you were getting $1,000 per month 10 years ago, you’d be getting about $2,300 each month next year, instead of the $1,286 you’ll receive in reality.

You don’t have to be 70 years old to be doing better than that. Big names like Microsoft MSFT , Visa V , Cisco CSCO and Lockheed Martin LMT  have all provided double-digit annual growth in dividend payments since 2012. Many of those hikes have just kept pace with gains in their share prices–the S&P 500 Index is still up 157% in the last 10 years, or 9.9% compounded annually–so there’s no guarantee the next decade will bring more of the same. Below are 10 stocks with dividend yields higher than 3% and market capitalizations of at least $1 billion. All of them have declined year-to-date, but all have decade-long annual dividend growth rates of more than the 8.7% COLA figure, according to Factset data.

10 Inflation Beating Dividend Stocks

These 10 stocks yielding at least 3% have given investors better than an 8.7% cost-of-living adjustment for the last 10 years–every year.

Market values, dividend yields and price returns are as of October 12, 2022.

Photo by Alexandre Debiève on Unsplash