10 Stocks To Compound Interest With Dividend Growth

Published on September 22nd, 2025 by Bob Ciura

Compounding is what makes the stock market such a powerful vehicle for wealth creation.

The difference over time between simple interest and compound interest is staggering:

$100 at 9% simple interest is $190 after 20 years
$100 at 9% compound interest is $560 after 20 years

That’s nearly a 3x difference between simple and compound interest – and that difference would be even more pronounced over longer time periods or a higher interest rate.

There are 3 components of compounding:

The growth rate (or interest rate, rate of return, etc.)
The length of each period
The number of periods

Investing returns are measured over time. You can’t speed up time; the length of each period is fixed.

This means compounding in the stock market comes down to the rate of return you receive on an investment and the number of periods over which the investment compounds.

Obviously (and unfortunately), we don’t get to pick the rate of return we receive from an investment. All we can do is tilt the odds in our favor by investing in quality stocks likely to grow earnings and dividends at a respectable rate.

Fortunately, eye-popping return numbers aren’t needed for long-term wealth creation. Consistently solid returns over longer periods of time can create very satisfactory results.

And that leads us to the 3rd component of compounding – the number of periods over which your investment compounds.

Long-term investors should look to quality dividend stocks such as the Dividend Kings, which have increased their dividends for over 50 consecutive years.

You can see the full downloadable spreadsheet of all 56 Dividend Kings (along with important financial metrics such as dividend yields, payout ratios, and price-to-earnings ratios) by clicking on the link below:

10 Stocks To Compound Interest With Dividend Growth

This is why investing in businesses that have staying power is so important. It leads to longer-holding periods, and greater compounding.

This article will rank 10 Dividend Kings with 50+ years of dividend growth, with strong expected growth for the future.

The 10 stocks are ranked by annual expected growth of earnings-per-share. You can instantly jump to any specific section of the article by clicking on the links below:

Long-Term Dividend Compounder #10: Parker-Hannifin Corp. (PH)

Expected Growth Rate: 9.0%

Parker-Hannifin is a diversified industrial manufacturer specializing in motion and control technologies. The company generates annual revenues of $20 billion. Parker-Hannifin has increased the dividend for 69 consecutive years.

In early August, Parker-Hannifin reported (8/7/25) results for the fourth quarter of 2025. Organic sales grew 2% over last year’s quarter, as 9% growth in aerospace more than offset a decline in North American Business. Adjusted earningsper-share grew 14%, from $6.75 to $7.69, thanks to strong sales and a wider profit margin in all segments.

Parker-Hannifin exceeded the analysts’ consensus by $0.61. Notably, Parker-Hannifin has exceeded the analysts’ EPS estimates for 40 consecutive quarters, an eye-opening streak.

The company provided positive guidance for fiscal 2026. It expects 3% organic sales growth and adjusted earnings-per-share of $28.40-$29.40. We note that management tends to be conservative in its guidance.

Click here to download our most recent Sure Analysis report on Parker-Hannifin (preview of page 1 of 3 shown below):

Long-Term Dividend Compounder #9: Illinois Tool Works (ITW)

Expected Growth Rate: 9.0%

Illinois Tool Works is a diversified multi-industrial manufacturer with seven unique operating segments: Automotive, Food Equipment, Test & Measurement, Welding, Polymers & Fluids, Construction Products and Specialty Products.

Last year the company generated $15.9 billion in revenue. The company is geographically diversified, with more than half of its revenue generated outside of the United States.

On August 1st, 2025, Illinois Tool Works reported second quarter 2025 results. For the quarter, revenue came in at $4.1 billion, rising 1% year-over-year. Sales increased 3.8% in the Automotive OEM segment, the largest out of the company’s seven segments.

Furthermore, its Polymers & Fluids, and Construction Products segments saw revenue decline 3.4% and 6.1%, respectively.

Meanwhile, Specialty Products, Test & Measurement and Electronics, Food Equipment, and Welding had revenue growth of 1.1%, 1.2%, 2.1%, and 2.9%, respectively. Net income equaled $755 million or $2.58 per share compared to $759 million or $2.54 per share in Q2 2024.

Click here to download our most recent Sure Analysis report on ITW (preview of page 1 of 3 shown below):

Long-Term Dividend Compounder #8: Lowe’s Cos., Inc. (LOW)

Expected Growth Rate: 9.0%

Lowe’s Companies is the second-largest home improvement retailer in the US (after Home Depot). The company was founded in 1946 and is headquartered in Mooresville, NC. Lowe’s operates or services more than 1,700 home improvement and hardware stores in the U.S.

On August 20, 2025, Lowe’s announced it will acquire Foundation Building Materials (FBM), for $8.8 billion. FBM is a distributor of interior building products for large residential and commercial professionals in new construction and repair and remodel. It generated $6.5 billion in revenue in 2024. The deal is expected to close in the fourth quarter.

Lowe’s reported second quarter 2025 results on August 20th, 2025. Total sales came in at $24.0 billion compared to $23.6 billion in the same quarter a year ago. Comparable sales increased by 1.1%. Net earnings-per-share of $4.27 compared to $4.17 in second quarter 2024, and were driven by strong performance in Pro and DIY, partly offset byunfavorable weather.

The company did not repurchase any of its common stock in the quarter, but it paid out $673 million in dividends. Lowe’s updated its fiscal 2025 outlook and now expects to earn adjusted EPS of $12.20 to $12.45 on total sales of $84.5 to $85.5 billion.

Click here to download our most recent Sure Analysis report on LOW (preview of page 1 of 3 shown below):

Long-Term Dividend Compounder #7: Automatic Data Processing (ADP)

Expected Growth Rate: 9.0%

Automatic Data Processing is one of the largest business services outsourcing companies in the world. The company provides payroll services, human resources technology, and other business operations to more than 700,000 corporate customers. Automatic Data Processing produces annual revenue of about $20 billion.

ADP posted fourth quarter earnings on July 30th, 2025, and results were better than expected once again. For the quarter, adjusted earnings-per-share came to $2.26, which was three cents ahead of estimates. Earnings rose from $2.09 a year ago. Revenue was up more than 7% year-over-year to $5.1 billion, beating estimates by $50 million.

Employer Services revenue was $3.47 billion, up 8% year-over-year. Segment earnings were $1.16 billion, rising 9% as pretax margin was up 50 basis points to 33.5% of revenue. PEO Services revenue was up 7% to $1.66 billion. Segment earnings were up 6% to $220 million on pretax margin that declined 20 basis points to 13.2%.

Expenses rose from $3.77 billion a year ago to $4.03 billion in Q4. Adjusted EBIT margin was 23.7% of revenue, up from 23.3% a year earlier. Guidance was initiated at $10.81 to $11.01 in adjusted earnings-per-share.

Click here to download our most recent Sure Analysis report on ADP (preview of page 1 of 3 shown below):

Long-Term Dividend Compounder #6: W.W. Grainger Inc. (GWW)

Expected Growth Rate: 10.0%

W.W. Grainger, headquartered in Lake Forest, IL, is one of the largest business-to-business distributors of maintenance, repair, and operations (“MRO”) supplies in the world. The company was founded in 1927 and generated sales of $17.2 billion in 2024.

On August 1st, 2025, W.W. Grainger posted its Q2 results for the period ending June 30th, 2025. For the quarter, revenues were $4.55 billion, up 5.6% on a reported basis and up 5.1% on a daily, constant currency basis compared to last year.

The High-Touch Solutions segment saw sales grow by 2.5% on a reported basis, and 2.8% on a daily, constant currency basis due to broad-based growth across all geographies.

In the Endless Assortment segment, sales were up 19.7%. Revenue growth for the segment was driven by strong performance at both MonotaRO and Zoro.

Net income equaled $482 million, up 2.6% compared to Q2-2024. Net income was supported by strong expense leverage in Endless Assortment, even as gross margin declined 80 basis points to 38.5%, and operating margin fell 20 basis points to 14.9%.

Margin pressure in High-Touch from tariff-related inflation was partially offset by improvements at Zoro. Earnings-per-share came in at $9.97, 4.8% higher year-over-year, and were aided by a lower share count.

Click here to download our most recent Sure Analysis report on GWW (preview of page 1 of 3 shown below):

Long-Term Dividend Compounder #5: Nordson Corp. (NDSN)

Expected Growth Rate: 10.0%

Nordson has operations in over 35 countries and engineers, manufactures, and markets products used for dispensing adhesives, coatings, sealants, biomaterials, plastics, and other materials, with applications ranging from diapers and straws to cell phones and aerospace. The company generated $2.7 billion in sales last fiscal year.

On August 20th, 2025, Nordson reported third quarter results for the period ending July 31, 2025. For the quarter, the company reported sales of $742 million, 12% higher compared to $662 million in Q3 2024, driven by an 8% positive acquisition impact, 2% organic sales increase, and 2% favorable forex translation.

The Industrial Precision, Advanced Technology, and Medical and Fluid Solutions segments saw sales increase by 1% 17%, and 32%, respectively.

The company generated adjusted earnings per share of $2.73, a 13% increase compared to the same prior year period. The backlog declined 5% sequentially due to strong shipments.

On August 28th, 2025, Nordson increased its dividend by 5% to $0.82 per share quarterly, marking 62 years of increases.

Nordson’s results to date are still in line with its initial FY 2025 outlook, which expected sales of $2.75 billion to $2.87 billion and adjusted EPS of $9.70 to $10.50.

Click here to download our most recent Sure Analysis report on NDSN (preview of page 1 of 3 shown below):

Long-Term Dividend Compounder #4: Walmart Inc. (WMT)

Expected Growth Rate: 11.0%

Walmart traces its roots back to 1945 when Sam Walton opened his first discount store. The company has since grown into the largest retailer in the world, serving more than 230 million customers each week. Revenue should be around $700 billion this year.

Walmart posted second quarter earnings on August 21st, 2025, and results were better than expected on both the top and bottom lines. Adjusted earnings-per-share came to 68 cents, which was six cents ahead of estimates. Revenue was up almost 5% year-on-year to $177.4 billion, beating estimates by $3 billion.

Comparable sales in the US were up 4.6%, 50 basis points ahead of consensus. Transactions were 1.5% higher, while the average ticket was up 3.1%. E-commerce sales were up 26% and contributed 350 basis points to comparable sales, implying the physical stores contributed 110 basis points.

Sam’s Club comparable sales were up 5.9%, on strength in grocery and health & wellness. International sales were up 5.5% to $31.2 billion. The advertising business was up 46% during the quarter.

Adjusted operating income was up just 0.4% during the quarter on sales leverage, offset by margin losses from tariffs. The company ended Q2 with cash of $9.4 billion and total debt of $0.3 billion. Free cash flow was $6.9 billion, and inventories were up 3.8% year-over-year to $57.7 billion.

Guidance is for 3.75% to 4.75% sales growth for the year, up slightly from prior guidance.

Click here to download our most recent Sure Analysis report on WMT (preview of page 1 of 3 shown below):

Long-Term Dividend Compounder #3: S&P Global Inc. (SPGI)

Expected Growth Rate: 11.0%

S&P Global is a worldwide provider of financial services and business information and revenue of over $13 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 51 consecutive years.

S&P posted second quarter earnings on July 31st, 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.

Click here to download our most recent Sure Analysis report on SPGI (preview of page 1 of 3 shown below):

Long-Term Dividend Compounder #2: Stepan Co. (SCL)

Expected Growth Rate: 15.0%

Stepan manufactures basic and intermediate chemicals, including surfactants, specialty products, germicidal and fabric softening quaternaries, phthalic anhydride, polyurethane polyols and special ingredients for the food, supplement, and pharmaceutical markets.

It is organized into three distinct business lines: surfactants, polymers, and specialty products. These businesses serve a wide variety of end markets.

The surfactants business is Stepan’s largest by revenue. A surfactant is an organic compound that contains both water-soluble and water-insoluble components.

Stepan posted second quarter earnings on July 30th, 2025, and results were much worse than expected on both the top and bottom lines. Adjusted earnings-per-share came to 52 cents, which was nowhere close to estimates for 90 cents. Revenue was up 7% year-over-year to $595 million, missing estimates by $3.6 million.

Surfactant sales were $412 million, with selling prices soaring 11% on pass-through of raw material costs, primarily. Sales volumes were down 1%. Polymers net sales were up 2% to $163 million. Volumes were up 7% but selling prices declined 7%. Specialty Product sales were $20.5 million, up 22%, but margins worsened.

Adjusted EBITDA was $51.4 million, up 8% year-over-year. Adjusted net income was $12 million. Cash from operations came to $11.2 million, and free cash flow was negative $14.4 million on higher working capital requirements, as well as raw material builds.

Click here to download our most recent Sure Analysis report on SCL (preview of page 1 of 3 shown below):

Long-Term Dividend Compounder #1: Nucor Corp. (NUE)

Expected Growth Rate: 15.7%

Nucor is the largest publicly traded US-based steel corporation based on its market capitalization. The steel industry is notoriously cyclical, which makes Nucor’s streak of 52 consecutive years of dividend increases even more remarkable.

On July 28, 2025, Nucor Corporation reported its financial results for the second quarter of 2025. The company achieved net earnings attributable to Nucor stockholders of $2.60 per diluted share, with net sales reaching $8.46 billion, up 8% from the second quarter of 2024. EBITDA was $1.30 billion, reflecting operational strength.

All three reporting segments—steel mills, steel products, and raw materials—showed sequential earnings growth, driven by higher average selling prices in sheet and plate mills, stable pricing with increased volumes, and improved scrap processing operations, respectively.

Total tons shipped to outside customers increased 8% year-over-year to approximately 6,820,000, with steel mill shipments up 10%. Operating rates at steel mills rose to 85%, compared to 80% in the prior quarter and 75% in the same quarter last year.

Click here to download our most recent Sure Analysis report on NUE (preview of page 1 of 3 shown below):