This is a guest contribution by Bob Ciura of Sure Dividend. Sure Dividend helps individual investors build high quality dividend growth portfolios for the long run.
The earlier someone invests for retirement, the better off they will be as their money will have the benefit of growing for a long period of time. Allowing invested dollars to compound over the long haul will likely lead to sizeable amounts.
Many high-quality stocks offer investors ways to buy dollar amounts instead of share amounts, called dividend reinvestment plans, or DRIPs.
With time, regular purchases and dividend reinvestment into high-quality stocks can help the investor achieve their financial goals.
This article will look at three of our favorite stocks that offer dividend reinvestment plans that also have long histories of raising their dividends each year, making them ideal DRIP stocks.
A.O. Smith (AOS)
A.O. Smith is a leading manufacturer of residential and commercial water heaters, boilers and water treatment products. It generates two-thirds of its sales in North America, and most of the rest in China.
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A.O. Smith has raised its dividend for 30 years in a row, making the company a Dividend Aristocrat. The company was founded in 1874 and is headquartered in Milwaukee, WI.
When A.O. Smith reported its second quarter earnings results, the company showed revenues of $1.01 billion, which represents a decline of 1% compared to the prior year’s quarter. A.O. Smith’s revenues were down by 1% in North America, while the international business saw a revenue decline of 2% compared to the previous year’s quarter, mainly due to China sales being down.
A.O. Smith generated earnings-per-share of $1.07 during the second quarter, which was up 1% on a year over year basis. Headwinds from lower revenues were more than offset by tailwinds from higher margins and buybacks. A.O. Smith raised its guidance for 2025: The company is forecasting earnings-per-share in a range of $3.70 to $3.90, which reflects that management expects earnings-per-share to be up slightly this year.
Thanks to a healthy housing market in the U.S., the company has enjoyed consistent growth in the domestic market throughout most of the last decade. For a long time, A.O. Smith’s sales performance was even more impressive in China, where sales have grown at a double-digits pace during the last decade.
China’s huge population, its robust GDP growth, and the booming of its middle class were major tailwinds in this important market. In addition, thanks to the severe pollution of the country, the demand for air purifiers remains strong as well.
AOS stock currently yields 1.9%.
Northwest Natural Holding (NWN)
NW Natural was founded in 1859 and has grown from a small utility to a large publicly traded utility today. The utility’s mission is to deliver natural gas to its customers in the Pacific Northwest and it has done that well, affording it the ability to raise its dividend for 69 consecutive years.
On August 7, 2025, Northwest Natural Holding Company reported results for the second quarter ended June 30, 2025, showing steady growth in customer base and rate recovery despite seasonal weakness typical of warmer months. The company recorded net income of $7.4 million, or $0.19 per diluted share, compared with $5.8 million, or $0.16 per share, in the same quarter last year.
Operating revenue totaled $219.6 million, slightly down from $222.3 million in the prior year, as lower gas usage from mild weather offset the benefit of rate increases and customer growth. Operating income was $28.9 million, up from $25.7 million, reflecting disciplined cost control and contributions from utility margin improvement.
For the first half of 2025, net income was $82.1 million, or $2.05 per share, compared with $76.7 million, or $1.97 per share, in the prior year.
We are forecasting an average growth rate of 4% for the next five years as NW Natural pushes through approved pricing increases and continues to acquire customers at low-single-digit rates, as it did with the new Oregon rate case.
NW Natural also has its water utilities business that will provide a small amount of growth, but higher earnings will primarily come from customer and pricing growth while the company invests in its water business for longer-term growth.
S&P Global (SPGI)
S&P Global is a worldwide provider of financial services and business information with revenue of over $15 billion. Through its various segments, it provides credit ratings, benchmarks and indices, analytics, and other data to commodity market participants, capital markets, and automotive markets. S&P Global has paid dividends continuously since 1937 and has increased its payout for 52 consecutive years.
S&P posted second quarter earnings on July 31, 2025, and results were better than expected on both the top and bottom lines. Adjusted earnings-per-share came to $4.43, which beat expectations by 21 cents. Revenue was up 6% year-over-year to $3.76 billion, beating estimates by $80 million.
Guidance was boosted to $17.00 to $17.25 in adjusted earnings-per-share, up slightly from prior. Revenue is also expected to rise about 6% this year, up from 5% prior. Cash from operating activities less capex should be about $5.5 billion this year, which is unchanged. Expenses were $2.22 billion, up fractionally from Q1 and up from $2.11 billion a year ago.
S&P Global’s business has benefited from a series of favorable secular trends. Since the Great Recession in 2009, total corporate debt has been on a steady rise, which means more ratings are needed. Lower global interest rates have continued to lead to more and more issuances of debt. However, this tailwind could unwind as rates in the US especially have risen quite a lot in 2025.
In addition, the company has three other strong segments that aren’t as dependent upon rates remaining low, should they rise again in the future. The company saw higher revenue in all of its operating segments once again in the most recent quarter, a sign this diversification is working nicely.
Disclosure: No positions in any stocks mentioned
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