Dividend Growth Stocks That Could 2X Your Income in 3 Years

Dividend investors are always on the lookout for stocks that will increase their passive income. While several companies have paid dividends for years, many don’t increase the payout. But not all companies are the same. For some companies, double-digit dividend increases are sustainable over a period of three to five years, driven by high earnings growth.

While it is a high bar, fundamentally stable companies are able to navigate market volatility without reducing or discontinuing their dividends. Very few companies can sustain dividend increases year after year, and a lot depends on earnings. Besides dividends, how the management chooses to allocate its capital will speak a lot about the dividend growth. I’ve identified three dividend growth stocks that could double your income in the next three years. 

NextEra Energy

NextEra Energy (NYSE:NEE) is one of the largest energy infrastructure companies in North America and has a wide portfolio of assets, which include solar, wind, natural gas, nuclear generation, and battery storage facilities. The energy sector is gaining traction, and the demand is growing quickly. 

Exchanging hands for $72.41, NEE stock is up 3.8% in 6 months and has a dividend yield of 3.13%. Its five-year dividend growth is 10.30% and it has a payout ratio of 60%. NextEra Energy reported a strong second quarter, attracting investor attention. 

The company’s EPS increased 9.4% in the second quarter, driven by the growth in its Florida electric utility and energy resources segment. It added 3.2 gigawatts to its backlog of renewable projects. I think NextEra will continue growing at a healthy rate over the next five years. The power demand is expected to increase due to the growing demand from AI data centres. This will require more renewable energy capacity, and as an industry leader, NextEra Energy is set to benefit.

A Goldman Sachs analyst has a buy rating for the stock with a price target of $91. The analyst is confident of the company’s long-term growth outlook through 2029. Further, UBS has a buy rating with a price target of $84. The investment firm is confident about the company’s long-term earnings growth potential.

Broadcom Inc.

Artificial Intelligence infrastructure company Broadcom (Nasdaq: AVGO) recently hit an all-time high of $310. Exchanging hands for $304, the stock is up 31% year-to-date and over 100% in 12 months. It has an exceptional portfolio of customized infrastructure software solutions and semiconductor chips. The AI market is huge, and the demand for chips is only going to soar in the coming months. 

Driven by the strong semiconductor business, Broadcom has reported an excellent quarter. A key growth driver, the segment saw a 46% year-over-year jump in revenue, and the AI networking revenue was up 170%. It reported a total revenue of $15 billion in the second quarter, up 20% year-over-year. 

It generated $6.4 billion in free cash flow and ended the quarter with $9.5 billion in cash in the balance sheet. AVGO has a dividend yield of 0.77% and the steady revenue growth makes me believe that it will increase the payout in the coming quarters. Broadcom has increased dividends for 14 years and has a dividend payout ratio of 39.38%. The company has an impressive 5-year dividend growth rate of 13.15%. It has enough cash to keep rewarding shareholders, and the recent growth has put it on several investors’ watchlists. 

Broadcom works with custom processors and has three hyperscalers as its customers. The management is confident that about the earnings growth in the coming years. It expects the adjusted EPS to rise 6% to 8% annually through 2027. With companies increasing their AI spending, Broadcom is set to benefit, and I believe it has the potential to double your dividend income and offer capital appreciation over the next three years. 

Domino’s Pizza Inc. 

Amidst the ongoing concerns about a slowing economy and the impact of tariffs, Domino’s Pizza (NYSE:DPZ) has come out stronger. While it can become expensive to head to a restaurant, ordering a pizza might not cost as much. That said, it is a tariff-resistant business. The company operates its manufacturing facilities throughout the U.S. and Canada, and if prices fluctuate, it can pass the higher costs to franchisees. 

It is a resilient business with a solid track record of delivering for investors. The company operates in more than 21,000 locations across 90 markets and enjoys high customer loyalty. Exchanging hands for $440, the stock has increased 1.1% this year. In the second quarter, it saw a 4% year-over-year revenue jump to $1.1 billion, and operating income increased 14.8%. 

The company impressed investors with a strong cash flow. The free cash flow was $332 million in the first six months of the year. This helps increase dividends, and Domino’s has a payout ratio of 37.75%. Its annual payout is $6.96 per share and has raised dividends for 12 consecutive years. Domino’s has an impressive five-year dividend growth rate of 17.84%.

The company added 178 stores globally, of which 148 were in international markets. The majority of its growth comes from adding new locations, and the company has the liquidity to continue doing so. It company has nailed a successful business model that allows it to keep costs low while generating regular franchise fees and royalties. 

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