Dividend stocks are a favorite among investors seeking passive income. While high yields often attract income-seeking investors, the best dividend stocks are the ones that consistently increase their payouts year after year. Two retailers that have recently boosted their dividends by 13% are TJX Companies (TJX) and Costco Wholesale (COST). Consumer or retail stocks often miss the limelight that tech stocks get, but these companies have a strong track record of weathering economic cycles and generating consistent returns. Rising dividends often signal management's confidence in future cash flows and business performance.
Here’s why these two dividend stocks deserve a spot in your portfolio.
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TJX Continues Its Dividend Growth Story
TJX Companies, the world's largest off-price retailer, is one such consumer stock that has been a reliable dividend stock. It operates well-known chains including T.J. Maxx, Marshalls, HomeGoods, Homesense, Sierra, and more. In March, the firm hiked its quarterly dividend by 13% to $0.48 per share. TJX's 29-year record of uninterrupted dividend increases has earned it the title of “Dividend Aristocrat.” TJX stock offers a forward yield of 1.2% with a reasonable payout ratio of 33.56%.
While e-commerce is a growing trend now, TJX's competitive edge stems from its ability to source branded merchandise at attractive prices and rotate inventory frequently, encouraging customers to visit stores often. The recent dividend hike reflects management's confidence in TJX's ability to generate consistent profits despite ongoing economic uncertainty. Comparable sales increased 6% in the first quarter of fiscal 2027, while EPS climbed 29% year-over-year (YOY) to $1.19.
In Q1 alone, TJX paid out $1.1 billion to shareholders through a combination of share repurchases and dividends. Management even raised full-year guidance, now expecting a close to 5% increase in revenue and an 8% increase in earnings. While the yield may not be high, the combination of stable earnings growth and a proven business model with consistent dividend hikes creates an attractive foundation for future dividend increases.
Overall, TJX stock is a consensus “Strong Buy” on Wall Street. Of the 22 analysts covering the stock, 19 rate it a “Strong Buy,” one says it is a “Moderate Buy,” and two have a “Hold” rating.
www.barchart.com Costco Uses Membership Strength to Reward Shareholders
Costco Wholesale is a membership-based warehouse retailer that sells a wide range of products at very low prices. Customers pay an annual membership fee to shop at Costco warehouses. Those fees account for a substantial amount of the company's profits rather than heavily marked-up merchandise. Recently, the company hiked its quarterly dividend by 13% to $1.47 per share. The increase follows years of steady dividend growth and periodic special dividends that have made COST stock a favorite among long-term investors.
Costco’s membership income is the most stable and recurring revenue stream for the company. Membership fee income increased nearly 11% to $1.37 billion in Q3 fiscal 2026. Net sales rose almost 12% to $69.2 billion while diluted EPS increased to $4.93 from $4.28 a year ago. The company paid out $1.1 billion in dividends in the quarter. With 82.9 million paid members and growing opportunities in AI, pharmacy, digital commerce, and warehouse expansion, Costco appears well-positioned to continue generating steady growth for years to come. The company’s yield of 0.60% and payout ratio of 27.18% may be low, but it has been paying and increasing dividends for 22 years in a row. Costco is very close to becoming a “Dividend Aristocrat.”
On Wall Street, COST stock is a consensus “Moderate Buy.” Of the 34 analysts covering the stock, 19 rate it a “Strong Buy,” three say it is a “Moderate Buy,” 11 rate it a “Hold,” and one analyst says it is a “Strong Sell.”
www.barchart.com On the date of publication, Sushree Mohanty did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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