Dividend growth investing. What does it mean to you? If you’re anything like me, it means amazing long-term total returns, growing passive income, and financial freedom.

But if you’re one of the naysayers out there, you throw out words like “boring”, “slow”, and “inferior”. Well, I’m here to prove the naysayers wrong.

I’ve put out countless videos showing how and why dividend growth investing is so powerful over the long run.

But if you’re one of those people who think this strategy can’t make you rich on just a little bit of money, think again.

Today, I want to tell you about five dividend growth stocks that turned $5,000 into $1 million. Ready? Let’s dig in.

This exercise is assuming you invested $1,000 into each stock in December 1991 – that’s 30 years ago.

So that’s $1,000 per stock. For a total investment of just $5,000.

That’s a rather small investment. Even factoring in inflation, because a dollar back then was worth more, we’re talking about an inflation-adjusted total investment of roughly $10,000. So not a lot of money here. Yet this investment turned into $1 million.

The first dividend growth stock I want to highlight today is Aflac (AFL).

Aflac is a supplemental insurance company primarily operating in the US and Japan.

Insurance was, is, and will always remain one of my very favorite business models. You typically have a captive customer base. And thanks to the delay between premiums collected and claims paid, an insurance company is able to build up a float – a powerful source of low-risk, low-cost capital that can earn a return in and of itself, on top of profitable underwriting operations. This is why many insurance companies have great track records for consistently paying and increasing dividends.

Aflac has increased its dividend for 40 consecutive years.

So even back in 1991, it had a decade of dividend growth under its belt. The 10-year DGR of 7.0% isn’t huge, but the company has recently been increasing its dividend at even faster rate – the most recent dividend increase was over 20%. Just think about that. 40 years into growing the dividend, and it’s accelerating. What an amazing business. Plus, the stock yields a rather appealing 2.8% right now. What does this kind of yield and growth add up to? Amazing long-term total returns.

A $1,000 investment into Aflac 30 years ago would now be worth $165,000 today.

That’s more than 150 times your original investment. So all an investor had to do back in 1991 is put $1,000 to work with Aflac, reinvest those dividends, and sit on the stock. It’s basically one decision, then go about your life. Yet that single $1,000 investment compounded into $165,000. Think dividend growth investing can’t make you rich? Well, here’s one of many examples of why that’s wrong. And I have more.

The second dividend growth stock I want to highlight is General Dynamics (GD).

General Dynamics is a global aerospace and defense company.

I’ve waxed ecstatic about defense companies for as long as I’ve been investing. Sovereign defense has been necessary since the birth of society. And it’ll be necessary for as long as society exists. Human conflict is part of the human condition, unfortunately. And as defense becomes more complex and expensive, defense companies like General Dynamics make more money. And they’re able to pay out bigger dividends.

They’ve increased their dividend for 30 consecutive years.

Okay. It’s admittedly tough to include this one on the list, only because their dividend growth track record basically started in 1991. While it’s not necessarily easy to say you would have known they’d go on to increase their dividend every year for the next three decades, I don’t think it’s all that hard to say that you would have been able to identify a major defense company as an excellent long-term investment. I mean, I figured that out almost as soon as I started investing in 2010. With a 10-year dividend growth rate of 10.2%, paired with a yield of 2.3%, this one checks the right boxes. Also checking the right boxes is the long-term total return here.

This defense company would have turned a single $1,000 investment 30 years ago into $230,000 today.

More than 200 times your initial money. On a business model that’s about as sure a thing as it possibly gets. The great thing about this is, nothing has changed. It’s not like sovereign defense is less important today than it was 30 years ago. And I don’t see it being less important 30 years from now. Thus, General Dynamics should do very, very well over the next 30 years, turning even a small investment today into a very healthy sum by the year 2051.

Next up, let’s talk about Hormel Foods (HRL).

Hormel is a global branded food company.

This is almost too easy. We’re talking about food here. You don’t have to do hardcore research to discover that people, you know, eat. There’s nothing revolutionary about this. But that’s what makes this a great idea. It’s an investment thesis that revolves around the necessity of food. And because of that necessity, a company like Hormel is able to reward its long-term shareholders handsomely.

The company has increased its dividend for 54 consecutive years.

That makes them not just a Dividend Aristocrat but a Dividend King, which a special status reserved for stocks with 50 or more consecutive years of dividend increases. The 10-year DGR of 16.0% is fantastic. And the stock even yields a market-beating 2.3%. Hmm. Double-digit long-term dividend growth and a yield of over 2%? Shouldn’t that translate into a fantastic long-term total return? Yep. And that’s exactly what you get here.

This food company turned a single $1,000 investment into $198,000.

Over the course of 30 years, a simple $1,000 investment into a simple business model multiplied the money by nearly 200 times. How amazing is that? If that doesn’t get your heart beating a little faster, I don’t know what will. Investing need not and should not be complicated. In fact, the more complicated an idea is, the more likely it is that something is wrong. I love high-quality dividend growth stocks predicated on simple business models. And I also love compounding my money at a high rate. It just so happens that these two concepts are almost symbiotic.

The fourth dividend growth stock we have to talk about is Parker-Hannifin (PH).

Parker-Hannifin is a global leader in motion and control technologies.

This high-quality industrial firm manufactures a lot of products that are needed in all kinds of industries. Think valves, pumps, and regulators. And think industries ranging from aerospace to renewable energy to semiconductors. Parker-Hannifin is almost everywhere. And that sets them up to be a dividend growth powerhouse, which is exactly what they are.

This industrial company has increased its dividend for 65 consecutive years.

Let’s get this straight. This company had already been increasing its dividend for 35 consecutive years… in 1991. Now, you might be thinking that they’re slowing down. We’re nearly 70 years into this story. Well, you’d be wrong. Their 10-year DGR is 12.6%. Impressive, right? Well, their most recent dividend increase was 17%! The dividend raises are getting bigger. The stock only yields 1.3%, so it’s more of a long-term compounder than an income play. But what a compounder it is.

Investing $1,000 into Parker-Hannifin 30 years ago would now be worth $96,000.

That’s a near-100 fold increase in your money. By investing in simple-to-understand products like pumps. This business is just as adept at manufacturing pumps as it is pumping growing dividends and incredible returns to its shareholders. And I see nothing to indicate that this is any less true today than it was in 1991, 2001, or 2011. I can’t imagine that any longtime Parker-Hannifin shareholders are unhappy with their investment, nor do I think they’ll be unhappy 10, 20, or 30 years down the road.

Last but certainly not least, I want to highlight VF Corp. (VFC).

VF is  a worldwide apparel and footwear company.

Again. A very, very simple business model here. Notice a trend, yet? There’s nothing complicated about any of these businesses. We’re now talking about clothing and footwear. Unless you want to be ostracized from society, you have to wear clothing. VF takes something with basic utility and amplifies it with unique style that’s designed around a lifestyle. Their Vans brand is a great example of that. Their cleverness at doing this has allowed them to pay out a safe, growing dividend to shareholders like clockwork.

VF has increased its dividend for 49 consecutive years.

And guess what? I think they’re really just getting started with that. I see no reason why VF can’t increase its dividend for another 49 straight years, which bodes well for the long-term shareholders of today. And with a 10-year DGR of 12.9% to go along with a market-beating yield of 2.6%, investors are looking at a compelling combination of yield and growth here. You know what else is compelling? The long-term total return story.

VF would have turned a single $1,000 investment 30 years ago into $309,000 today.

More than 300 times your original investment. That’s eye-boggling, jaw-dropping, mouth-watering stuff. On clothing. But this is all ancient history, right? It can’t keep doing this, right? Wrong. VF is still making its shareholders money. In fact, I highlighted this name as an undervalued high-quality dividend growth stock back in early October – less than three months ago. Now, I highlighted it as a long-term idea, yet it’s already up more than 11%. And I think there’s plenty more where that came from when looking out over the coming years.

So what did $1,000 into each of these five dividend growth stocks for 30 years do?

Well, that initial $5,000 sum invested evenly across these five dividend growth stocks – that’s $1,000 per stock – would have turned into approximately $1 million today. That’s $5,000 invested, turning on dividend reinvestment, and then sitting on your hands for 30 years, yet you end up with, essentially, lottery money at the end of it. This is why it’s so important to start early, stick to quality, and be patient. Dividend growth investing is a very powerful strategy over the long run. If you think this strategy is somehow inferior, or can’t make you rich on even a small amount of money, these five dividend growth stocks turn that logic on its head. If you’re not already taking advantage of this strategy by putting money to work with world-class businesses paying reliable, rising dividends, you might want to change that.

— Jason Fieber

P.S. If you’d like access to my entire six-figure dividend growth stock portfolio, as well as stock trades I make with my own money, I’ve made all of that available exclusively through Patreon.

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