Written and reviewed by Kevin Nerway · Last verified 1 May 2026
Key Takeaways
- The 2026 'Dividend Growers' list features 10 stocks, a decrease from 13 in the previous year.
- Qualifying companies must demonstrate five consecutive years of dividend growth of 10% or more while maintaining a yield above 1%.
- Morningstar analysts identify five of these stocks-Zoetis, Accenture, Intuit, Domino’s Pizza, and SBA Communications-as trading at discounts of 10% or more.
- Future outlooks suggest Zoetis may lose its status in 2027 following a smaller-than-required 6% dividend increase already declared for 2026.
Shifting Dynamics in the 2026 Dividend Growth Landscape
According to the Morningstar DividendInvestor newsletter, the criteria for being classified as an exceptional dividend grower are rigorous. To make the 2026 class, companies must have achieved five straight years of dividend growth of 10% or more. This year, the list narrowed to 10 stocks, down from 13 in 2025. This contraction suggests a tightening of high-level payout consistency across the broader market, even as corporate earnings remain a focal point for professional-grade market research.
Among the names that successfully passed these rigorous checks are returning stalwarts and three notable newcomers: Intuit, Motorola Solutions, and TJX. The inclusion of these firms highlights a shift in where smart money positioning signals may be focusing, as dividend growth is often viewed by analysts as a proxy for high-quality earnings and management confidence.
Market Impact Snapshot
| Asset | Direction | Confidence |
|---|---|---|
| S&P 500 (Quality Factor) | Bullish | Medium |
| Tech Sector Dividends | Bullish | High |
| Healthcare Dividends | Bearish | Medium |
| Nasdaq 100 Income Stocks | Bullish | Medium |
Valuation Gaps in High-Quality Dividend Payers
One of the most actionable insights for those utilizing prop trading calculators to assess portfolio risk is the valuation gap identified by Morningstar. Despite their track record of double-digit payout increases, half of the 2026 class is currently considered undervalued. Specifically, Zoetis, Accenture, Intuit, Domino’s Pizza, and SBA Communications are reportedly trading at discounts of 10% or more relative to their fair value estimates.
For traders focusing on fundamental analysis, these discounts represent a potential margin of safety. David Harrell, editor of the DividendInvestor newsletter, notes that these stocks are often suited for investors who view dividend growth as a sign of quality rather than just a source of current income. High ongoing rates of dividend increases typically signal quality companies with growing earnings, which can provide a stabilizing effect during periods of market volatility.
The Near-Miss List and Yield Discrepancies
The research also highlighted a "near-miss" list, which is nearly twice the size of the primary dividend growers list. Interestingly, the average yield of these runners-up is higher than that of the official 10 standout stocks. This inverse relationship between yield and growth is a critical concept for those in an evaluation phase of their trading career; often, the highest yields come from companies with slower growth prospects or higher uncertainty.
To maintain their status, these firms must not only grow their payouts but also sustain a yield above 1% and maintain a "Narrow" or "Wide" moat rating. This ensures that the company possesses a sustainable competitive advantage. Traders looking for long-term consistency often compare drawdown rules across firms to see which platforms allow for the holding of such quality-driven equity positions over longer durations.
Forward-Looking Catalysts for 2027 Status
Looking ahead to 2027, the landscape is already shifting. Morningstar has identified several stocks on track to maintain their status due to already declared dividend increases. NextEra Energy, Snap-on, MSCI, and Motorola have announced hikes that should result in a 10% increase in the payout per share for the coming year.
Conversely, Zoetis is currently on track to slip from the standout list in 2027. The company has already implemented a 6% dividend increase for 2026, which falls short of the 10% threshold required by Harrell’s methodology. For traders managing a funded account, tracking these corporate actions is essential, as they often precede shifts in institutional order flow analysis and sector rotation.
Frequently Asked Questions
What are the requirements to be a Morningstar Dividend Grower?
To qualify for the 2026 class, a stock must have five consecutive years of dividend growth of 10% or more. Additionally, the company must maintain a dividend yield above 1% and hold a Narrow or Wide Morningstar Moat rating with a Lower or Medium Uncertainty Rating.
Why did the number of qualifying stocks decrease this year?
The list shrank from 13 stocks last year to 10 this year because fewer companies were able to meet the strict 10% annual growth threshold over a five-year period. This indicates that while many companies pay dividends, maintaining double-digit growth is becoming more difficult for large-cap entities.
Which dividend stocks are currently considered undervalued?
According to Morningstar analysts, five of the ten dividend growers are trading at discounts of 10% or more. These companies include Accenture, Intuit, Zoetis, Domino’s Pizza, and SBA Communications, suggesting potential upside for value-oriented investors.
Why is Zoetis expected to lose its status in 2027?
Zoetis has already declared a dividend increase of 6% for 2026. Because this is below the 10% minimum growth requirement set by the DividendInvestor newsletter, the firm will likely be excluded from the 2027 list unless an additional increase is announced.