3 Dividend Growth Stocks to Buy in June and Hold Forever

Globe and Mail

2 days ago

High-yield dividend stocks are great, but you know what's even better? High-yield dividends that can grow rapidly.
Prologis (NYSE: PLD), MPLX (NYSE: MPLX), and McCormick (NYSE: MKC) present investors with an unusual opportunity. They've been offering yields that are more than double the market average, plus they tend to raise their payouts rapidly. Here's why there's a good chance they'll generate a double-digit yield on cost for investors who buy now and hold over the long run.
1. Prologis
Prologis is the largest owner of logistics-related real estate on the planet and offers a 3.6% yield at recent prices. At the end of March, it owned or had investments in a stunning 1.3 billion square feet of logistics real estate.
Prologis has one of the best credit ratings of any real estate investment trust (REIT), which enables it to borrow at interest rates its tenants can only dream of. For many businesses that own their logistics infrastructure, selling a building to Prologis and leasing it back is a great option for raising capital.
Amazon rents more space from Prologis than any other tenant. At just 5% of total rent, though, this REIT could maintain its dividend payout even if the everything store suddenly becomes the hardly anything store. A slew of businesses fueling the e-commerce transition enabled Prologis to raise its dividend payout by an impressive 11.7% annually over the past five years.
Sale-leaseback deals are already popular in the U.S., but this form of financing is still catching on in international markets. Currently, less than 30% of Prologis' net operating income is derived from international markets. Ex-U.S. operations playing catch-up could allow this REIT to continue its long history of big dividend payout raises.
2. MPLX
MPLX is a midstream energy business that pushes heaps of gas and crude oil through its growing pipeline operation. Until 2012, it was part of Marathon Petroleum, and the oil refining giant still buys a lot of the crude flowing through its pipes.
MPLX is an income-seeking investor's dream come true because the revenue its pipelines generate is relatively reliable. Extra visibility regarding demand through its Marathon Petroleum tie-up gives it an advantage that translates to rapid dividend raises.
At the moment, MPLX offers a huge 7.5% yield, and a new investor's yield on cost could quickly reach a double-digit percentage. The pipeline operator has raised its dividend payout by 8.1% annually over the past decade. With first-quarter net income rising 12% year over year, a big payout bump in the near term seems likely.
Before filling your retirement account portfolio with MPLX shares, it's important to realize this is a master limited partnership (MLP). Since MLPs are tax-advantaged entities, things can get complicated if your traditional IRA receives more than $1,000 annually from MLP investments.
3. McCormick
Investors who want to add some flavor to their portfolios should consider McCormick, the spice and flavorings giant. This company has paid a dividend every year since 1925, and it's raised its payout for 38 consecutive years.
If you look around your favorite grocery store, you'll find products from several businesses with decades-long dividend-raising track records. That said, I don't think any of them are raising their payouts as quickly as the spice king. McCormick's payout has risen by 8.4% annually over the past 10 years.
Rising commodity costs abroad have pressured earnings growth in recent quarters and pushed the stock down by about 31% from its peak in 2020. So far, 2025 hasn't been a great year for selling spices. In the first quarter, sales hardly budged year over year. Despite the temporary challenges, McCormick expects adjusted earnings to rise by 6% this year, at the midpoint of management's guided range.
At its depressed price, McCormick offers an unusually large 2.5% yield. This isn't a huge starting point, but steady movement in the right direction means patient shareholders could receive a double-digit yield on cost by the time they're ready to retire.
Should you invest $1,000 in Prologis right now?
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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Cory Renauer has positions in Amazon. The Motley Fool has positions in and recommends Amazon and Prologis. The Motley Fool recommends McCormick and recommends the following options: long January 2026 $90 calls on Prologis. The Motley Fool has a disclosure policy.