2 Dividend Growth Stocks Worth Holding for the Long Haul
Typically, stocks are categorized as value, growth, or dividend, but that doesn’t mean they can’t be a mix of these. In some cases, a stock can offer high growth and be a consistent dividend payer. It’s a win-win that generally pays off for investors.
If you’re looking for two dividend growth stocks worth holding in your portfolio, Broadcom (AVGO +0.28%) and Microsoft (MSFT +1.24%) fit the bill. Their yields aren’t high by any means, but they have impressive dividend track records showing they’re more shareholder-friendly than they often get credit for.
Image source: The Motley Fool.
Broadcom has a history of huge dividend increases
Broadcom is a semiconductor (chip) company that designs and develops chips used in everything from AI data centers to smartphones to broadband equipment. It has been around since 1961 but has become one of the world’s most valuable companies amid the current AI boom. Over the past five years, Broadcom’s stock has jumped up 761% (as of market close on Aug. 5).
Today’s Change
(0.28%) $1.22
Current Price
$428.98
Key Data Points
Market Cap
Day’s Range
$426.99 – $432.00
52wk Range
$281.87 – $495.00
Volume
1.5M
Avg Vol
25.9M
Gross Margin
65.66%
Dividend Yield
0.59%
The company has increased its annual dividend for 15 years, but what’s more impressive is by how much. In the past decade, Broadcom’s dividend has increased by 1,170%. That’s a compound annual growth rate (CAGR) of nearly 29%, which you’d be hard-pressed to find from any megacap company.
I wouldn’t anticipate a repeat over the next decade, but I do fully believe that Broadcom will continue increasing its dividend at an admirable rate. In the second quarter (Q2), Broadcom’s free cash flow was $10.26 billion (up 60% year over year), well above the $3.09 billion it paid out in dividends.
That leaves more than enough breathing room to cover the current dividend, support increases, and continue buying back shares.
AVGO Free Cash Flow (Quarterly) data by YCharts
Broadcom is for sure riding the high of the current AI boom, but it’s not a “15 seconds of fame” company. Semiconductors are crucial components of all technology, even beyond data centers and AI-related use cases. And with Broadcom being one of the premier powerhouses, it’s in a good position to continue cashing in.
Microsoft’s latest fiscal year confirms it’s still thriving
Microsoft is arguably the gold standard of tech companies, having been around since 1975. It was a rough start to the year for Microsoft, but the stock is up 3% year to date (as of market close on Aug. 5), after a nearly 25% run-up since it reported its fiscal year 2026 earnings.
The stock had struggled due to concerns about its AI spending, but its earnings results showed that the spending was paying off. Total revenue increased 18% year over year to $331.8 billion, Microsoft Azure revenue hit $100 billion for the first time, and total Microsoft Cloud revenue increased 27% to $214 billion.
Today’s Change
(1.24%) $6.22
Current Price
$506.21
Key Data Points
Market Cap
Day’s Range
$502.27 – $508.88
52wk Range
$349.20 – $553.72
Volume
3.2M
Avg Vol
41.2M
Gross Margin
67.94%
Dividend Yield
0.71%
Microsoft’s dividend tends to fly under the radar, but it has been one of the more consistent in the tech world. It has 21 years of consecutive dividend increases under its belt, and when it makes its dividend announcement in September, it’ll almost certainly be the 22nd consecutive year.
Microsoft hasn’t increased its dividend at the rate of Broadcom (few companies have), but it has still managed to raise it from $0.36 to $0.91 per quarter over the past decade. Combine that with the 750% increase in Microsoft’s stock during that time, and it has been a true 2-for-1 benefit.
Microsoft is one company whose longevity and dividend stability you don’t have to question. It’s as ingrained in the corporate world as any other company, providing consistency and reliability that few other tech companies can match. Even though its stock has struggled this year, I expect it to be a consistent market-beater for quite some time.
