3 High-Potential Dividend Growth Stocks for 2024

Uncertainties all over the world have been contributing to a growing expectation of a volatile market structure for the next year. Volatility caused by geopolitical risks, political uncertainty, and persistently increasing rates of inflation calls for a stable mode of investment away from all this variability.

Amid this backdrop, investors could focus on dividend stocks, The Home Depot, Inc. (HD), AbbVie Inc. (ABBV), and  Lowe's Companies, Inc. (LOW), which are offering steady income and high potential for growth in 2024.

With the world riddled with disruptions caused by a surge in inflation, fraying geopolitics and war, climate disasters, and rapidly evolving technologies, a consistent theme of market volatility has been present for a long time. The future seems unpredictable, and that only amplifies the financial instability lurking around every corner.

According to the International Monetary Fund (IMF), near-term global financial risks may be contained. However, easing monetary policies could fuel asset price bubbles, and markets might be dangerously underestimating the risks posed by military conflicts and upcoming elections.

A concerning "widening disconnect" between heightened geopolitical uncertainty and unusually low market volatility could lead to a market shock. This scenario echoes the chaotic market movements in August, triggered by a Bank of Japan interest rate hike that led to massive de-leveraging.

In these turbulent conditions, dividend growth stocks emerge as a beacon of stability. Offering a consistent and growing income stream, they are a perfect choice for investors seeking passive income. These stocks provide more than just returns. They offer resilience, weathering the market storms while ensuring a steady flow of dividends.

So, let us dive deep into the fundamentals of three dividend growth stocks, starting with #3.

Stock #3: The Home Depot, Inc. (HD)

HD is a home improvement retailer that sells various building materials, home improvement products, lawn and garden products, décor products, facilities maintenance, repair, and operations products. It also offers installation services for flooring, water heaters, bath, garage doors, cabinets, and more.

On June 18, HD completed the acquisition of SRS Distribution, Inc., a residential specialty trade distribution company, for a total enterprise value of approximately $18.25 billion. The acquisition could enhance HD’s customer service, capabilities, and expertise in specialty trade verticals.

On November 14, HD’s declared a third-quarter cash dividend of $2.25 per share. The dividend was payable on December 12, 2024, to shareholders of record on the close of business on November 27, 2024. The commitment to returning value may attract long-term investors, potentially supporting stock demand. It also signals a healthy cash flow, reinforcing the company’s positive market image.

HD has increased its dividends for 15 consecutive years. It pays an annual dividend of $9, which translates to a 2.16% yield at the current price level. The stock’s dividend payouts have increased at a CAGR of 10.9% over the past three years. Moreover, its four-year average dividend yield is 2.31%.

For the third quarter of fiscal 2024, which ended October 27, 2024, HD’s net sales increased 6.6% year-over-year to $40.22 billion. Its gross profit grew 5.4% from the year-ago value to $13.43 billion. Moreover, the company’s adjusted operating income rose 1.9% from the prior year’s quarter to $5.56 billion.

In addition, HD’s net earnings and adjusted EPS came in at $3.65 billion and $3.78, respectively.

Analysts expect HD’s revenue and EPS for the fiscal fourth quarter ending January 2025 to increase 11.2% and 6.9% year-over-year to $38.69 billion and $3.01, respectively. In addition, the company surpassed the consensus EPS estimates in all of the four trailing quarters.

Shares of HD have surged 7.5% over the past three months and 16% over the past year, closing the last trading session at $410.71.

HD’s POWR Ratings mirror its fundamentals. HD has a B grade for Stability, Sentiment, and Quality. The POWR Ratings are calculated by taking into account 118 different factors, with each factor weighted to an optimal degree.

Within the Home Improvement & Goods industry, HD is ranked #24 out of 57 stocks. In addition to the POWR Ratings highlighted above, you can check HD’s ratings for Momentum, Value, and Growth here.

Stock #2: AbbVie Inc. (ABBV)

ABBV discovers, develops, manufactures, and sells pharmaceuticals. Its product portfolio covers a wide range of conditions, such as Immunology, Oncology, Neuroscience, Eye Care, and others. The company also offers facial injectables, plastics and regenerative medicine, body contouring, and skincare products, and more.

On December 13, ABBV announced a definitive agreement to acquire Nimble Therapeutics, a biotechnology company offering oral peptide therapeutics. The acquisition enhances ABBV’s drug pipeline by integrating Nimble’s oral peptide IL23R inhibitor, peptide synthesis, screening, and optimization platform, boosting its ability to expand future therapeutic offerings.

On December 11, ABBV completed the acquisition of Aliada Therapeutics, a biotechnology company advancing therapies using a novel blood-brain barrier (BBB)-crossing technology to address challenging central nervous system (CNS) diseases.

The acquisition could enhance ABBV’s pipeline for the treatment of Alzheimer's disease through Aliada’s lead investigational asset is ALIA-1758 and bolster its neuroscience discovery and development.

On October 30, ABBV announced a 5.8% increase in its quarterly cash dividend, raising it from $1.55 per share to $1.64 per share. The dividend is payable on February 14, 2025, to shareholders of record as of January 15, 2025, rewarding investors with higher returns.

ABBV pays an annual dividend of $6.56, which translates to a 3.78% yield at the current price level. Its dividend payouts have grown at a CAGR of 7.7% over the past five years, while its four-year average dividend yield is 3.91%. ABBV has raised its dividends for 11 consecutive years.

For the fiscal 2024 third quarter that ended September 30, ABBV’s net revenues increased 3.8% year-over-year to $14.46 billion. Its operating earnings rose 68% from the year-ago value to $3.83 billion. Additionally, the company’s adjusted earnings and adjusted EPS grew 1.5% and 1.7% from the prior year’s quarter to $5.33 billion and $3.00, respectively.

For the fiscal fourth quarter ending December 2024, Street expects ABBV’s revenue and EPS to increase 3.6% and 6.7% year-over-year to $14.81 billion and $2.98, respectively. Additionally, the company topped the consensus revenue estimates in all four trailing quarters.

ABBV’s shares have surged 1.8% over the past six months and 11.4% over the past year to close the last trading session at $171.63.

ABBV’s strong prospects are reflected in its POWR Ratings. The stock has an overall rating of A, which translates to a Strong Buy in our proprietary rating system.

ABBV has a B grade for Growth, Sentiment, and Quality. It is ranked #7 out of 153 stocks within the Medical - Pharmaceuticals industry.

To access ABBV’s Momentum, Value and Stability ratings, click here.

Stock #1: Lowe's Companies, Inc. (LOW)

LOW offers products for construction, maintenance, repair, remodeling, and decorating. The company also provides home improvement products, such as appliances, seasonal and outdoor living, lawn and garden, lumber, kitchens and baths, tools, and more.

On December 11, LOW introduced new initiatives to drive growth in its Total Home strategy. The company launched AI-driven frameworks to enhance customer experience and boost productivity, providing more personalized service. Additionally, LOW revealed its first product marketplace, offering customers access to a broader range of home improvement items.

The company also announced plans to expand its store presence and increase offerings in rural areas. These initiatives aim to provide customers with greater value, meeting their total home improvement needs with exceptional service. By diversifying product offerings and improving accessibility, LOW seeks to strengthen its market position and foster customer growth.

On November 4, LOW announced the introduction of Lowe's Digital Home Platform, which will be exclusively available to MyLowe's Rewards members. Through this platform, LOW members have access to free, personalized information about products in their homes, including warranties and manuals, maintenance suggestions, and more.

The exclusive offering can drive repeat business, increase membership, and enhance data collection for targeted marketing, ultimately supporting growth and improving financial performance through higher sales and customer retention.

On November 15, LOW’s board of directors announced a quarterly cash dividend of $1.15 per share. The dividend is payable on February 5, 2025, to shareholders of record as of January 22, 2025.

LOW has raised its dividends for 61 consecutive years, currently offering an annual dividend of $4.60, which equates to a 1.75% yield at the current price level. Furthermore, its dividend payouts have grown at a CAGR of 17.1% over the past three years, with a four-year average dividend yield of 1.67%.

For the third quarter that ended November 1, 2024, LOW’s net sales came in at $20.17 billion. Its operating income was reported to be $2.54 billion. Additionally, the company’s net earnings and earnings per common share came in at $1.70 billion and $2.99, respectively.

The consensus revenue and EPS estimates of $84.53 billion and $12.51 for the fiscal year ending January 2025 exhibit a year-over-year rise of 1.4% and 5.1%, respectively. Moreover, the company topped the consensus EPS estimates in all four trailing quarters, which is impressive.

The stock has surged 6.3% over the past nine months and 15.3% over the past year to close the last trading session at $260.10.

LOW’s POWR Ratings reflect its robust prospects. The stock has an overall rating of B, equating to a Buy in our proprietary rating system.

LOW has a B grade for Quality. Within the Home Improvement & Goods industry, it is ranked #12 out of 57 stocks.

Click here to access LOW’s ratings for Stability, Sentiment, Growth, Value, and Momentum.

What To Do Next?

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HD shares were unchanged in premarket trading Tuesday. Year-to-date, HD has gained 21.42%, versus a 28.87% rise in the benchmark S&P 500 index during the same period.

Aanchal's passion for financial markets drives her work as an investment analyst and journalist. She earned her bachelor's degree in finance and is pursuing the CFA program. She is proficient at assessing the long-term prospects of stocks with her fundamental analysis skills. Her goal is to help investors build portfolios with sustainable returns.

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