These 20 dividend stocks have been the best income growers in the S&P 500

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Rather than focusing on high current dividend yields, you might build an income stream for retirement by holding stocks over the long term as payouts increase.

In the comment section of a recent MarketWatch article listing stocks with high dividend yields that were expected to be well supported by the companies’ cash flow, a reader suggested that it would have been useful to look at the stocks’ performance as well. After all, if you begin with a high dividend yield but watch share price decline over the years, your overall return might be lousy.

So today, instead of a screen designed to highlight stocks with high current dividend yields, we look at the compounding of dividend payouts over time. A long-term investor building a nest egg with a plan to eventually draw income from it may be well served on a total-return basis if the payouts increase significantly over time.For a new screen of dividend compounders, we began with the S&P 500.

Among those 268 companies, the following 20 have had the highest dividend CAGR over the past five years. See the note below the table for important information.Click here for Tomi Kilgore’s detailed guide to the wealth of information available for free on the MarketWatch quote page. Most of the dividends paid by these companies are regular quarterly dividends. But for Newmont Corp. NEM, -1.19%, the quarterly payout is based on spot prices for gold and on the company’s financial results. The company expects to pay an “annual base dividend” of a dollar a share on its “reserves gold pricing assumption” of $1,400 for 2023. Based on continuous front-month contracts on the New York Mercantile Exchange GC00, +0.17%, gold has fluctuated between $1,621.10 and $2,085.

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