3 No-Brainer Dividend Growth Stocks to Buy Right Now

Leo Sun, The Motley Fool

Wed, Apr 9, 2025, 2:05 AM 4 min read

As the Trump administration's "Liberation Day" tariffs rip through the markets and spark fears of a global recession, many investors are likely thinking about selling their stocks. That might seem like the prudent move, but investors who indiscriminately dump their stocks as the market swoons could miss out on some big gains once it recovers.

So instead of panicking, investors should seek out dividend growth stocks that consistently raise their dividends, have sustainable payout ratios, and are resistant to tariffs. These three stocks check all three boxes: tobacco giant Philip Morris International (NYSE: PM), financial services leader S&P Global (NYSE: SPGI), and retail titan Walmart (NYSE: WMT).

Plants sprouting from stacks of coins next to a piggy bank. — Image source: Getty Images.

Philip Morris International

PMI was spun off from Altria in 2008. That spinoff split PMI's overseas business from Altria's domestic business, and the former expanded overseas as the latter dealt with its domestic litigation and declining smoking rates.

From 2008 to 2024, PMI's adjusted earnings per share (EPS) grew at a compound annual rate of 4.4%. It repeatedly raised its cigarette prices and cut costs to offset lower smoking rates, and it expanded its portfolio with more smoke-free products like heated tobacco devices, e-cigarettes, nicotine pouches, and snus. Its business is well insulated from higher tariffs because it manufactures and sells its products overseas without any significant ties to the U.S. market.

PMI has also raised its dividend every year since its split with Altria, and it currently pays a forward yield of 3.6%. Its trailing payout ratio of 88% gives it room for future dividend hikes. Analysts expect its adjusted EPS to grow 9% in 2025 and 10% in 2026, and it still looks reasonably valued at 21 times forward earnings.

S&P Global

S&P Global provides financial data, credit ratings, and analytics services for about 80% of the Fortune 500 companies. Its tools are used by banks, insurance companies, corporations, universities, and institutional investors to make financial decisions, and it's accelerating and automating the process with artificial intelligence (AI)-driven tools.

S&P Global is naturally insulated from tariffs and other macro headwinds because it provides the essential financial tools for navigating a messy market and it isn't selling actual goods, only services. In a turbulent market, its services become even more valuable and needed. High interest rates temporarily throttled the growth of its credit ratings business in 2022 and 2023 (due to fewer new debt offerings), but it's poised to recover if interest rates continue to decline.

S&P Global's forward yield of 0.9% might seem low, but it's still a Dividend King that has raised its payout annually for 52 consecutive years. Its low trailing payout ratio of 29% will help it stay in that elite club for the foreseeable future. Analysts expect its EPS to grow 9% in 2025 and 12% in 2026, and it still isn't expensive at with a forward price-to-earnings ratio of 26.

Walmart

Walmart might seem like a risky investment right now, since many of its (non-grocery) products are manufactured outside the U.S., especially in China and other Asian countries. However, Walmart served 270 million customers per week across 10,750 stores and numerous online marketplaces in 19 countries at the end of fiscal 2025 (which ended this January) -- and that scale gives it lots of ways to counter the tariffs.

Walmart's suppliers have already pre-shipped many of their products to the U.S., before the tariffs kicked in. Walmart can also leverage its scale to negotiate lower prices with its suppliers, or slightly raise its retail prices to offset those higher costs.

Walmart's forward yield of 1.1% isn't impressive, but it's also a Dividend King that has raised its payout for 52 straight years and has a low payout ratio of 34%. Analysts expect its adjusted EPS to grow 5% and 12%, respectively, in fiscal 2026 and fiscal 2027. It isn't a screaming bargain at 31 times forward earnings, but its core strengths might justify that higher valuation.

Should you invest $1,000 in Philip Morris International right now?

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Leo Sun has positions in Altria Group. The Motley Fool has positions in and recommends S&P Global and Walmart. The Motley Fool recommends Philip Morris International. The Motley Fool has a disclosure policy.

3 No-Brainer Dividend Growth Stocks to Buy Right Now was originally published by The Motley Fool

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