Dividend-growth stocks—those companies with a history of steady dividend increases over time—have shone so far in 2026: The Morningstar US Dividend Growth Index has outperformed the Morningstar US Market Index by more than 5 full percentage points through Feb. 23.
Why are dividend-growth stocks outperforming in 2026 after lagging last year? The artificial intelligence anxiety gripping today’s stock market is playing a part, as investors rotate into defensive stocks with more stable earnings and predictable cash flows. “Dividend-payers may lag during market environments led by hot growth stocks, but in down periods like 2022 and 2018, they show resilience,” says Dan Lefkovitz, a strategist with Morningstar Indexes.
Dividend-growth stocks have three things going for them today:
- Companies with growing dividends tend to be profitable and financially healthy, two valuable qualities during periods of uncertainty.
- Companies with a history of dividend increases are also more likely to have competitive advantages that may allow them to pass along price increases and thereby maintain margins if inflation ticks up.
- Dividend-growth stocks often tend to be less volatile than the overall stock market and are therefore attractive investments for playing a little defense.
To uncover some cheap dividend-growth stocks to investigate further, we’re turning to the constituents of the Morningstar US Dividend Growth Index.
10 Cheap Dividend-Growth Stocks to Buy for 2026
These stocks from the Morningstar US Dividend Growth Index have steadily increased their dividends over the past five years, pay out no more than 75% of their earnings in the form of dividends, possess competitive advantages (as measured by the Morningstar Economic Moat Rating), and were trading at discounts to our fair value estimates as of Feb. 23, 2026. (Note: Given the increased uncertainty around AI-related stocks today, we’ve excluded technology stocks from the list.)
- UnitedHealth Group UNH
- Medtronic MDT
- Duke Energy DUK
- Mondelez International MDLZ
- EOG Resources EOG
- Marsh MRSH
- Cigna Group CI
- Elevance ELV
- Becton Dickinson BDX
- S&P Global SPGI
Here’s a little bit from Morningstar analysts about each of the dividend stocks from the list. All data is as of Feb. 23, 2026.
UnitedHealth Group
- Morningstar Rating: 4 stars
- Morningstar Economic Moat Rating: Narrow
- Forward Yield: 3.13%
- Sector: Healthcare
UnitedHealth Group tops our list of cheap dividend-growth stocks. Morningstar senior analyst Julie Utterback notes that the company typically pays out around 30% of its profits in dividends each year. While she expects a healthy payout ratio to continue, she does suggest that the dividend may not grow in the near future until the company’s earnings power and growth trajectory are assured. UnitedHealth Group stock trades 34% below our current $427 fair value estimate.
Ex-dividend date and dividend per share for UnitedHealth Group.
Medtronic
- Morningstar Rating: 4 stars
- Morningstar Economic Moat Rating: Narrow
- Forward Yield: 2.88%
- Sector: Healthcare
Medtronic is the second of five healthcare stocks on our list of undervalued dividend-growth stocks to buy. It’s also a dividend aristocrat, which means it has raised its dividend annually for more than 25 years. The company aims to return a minimum of 50% of its annual free cash flow to shareholders but has been in the 60% to 70% range in recent years due to its dividend and opportunistic share repurchases, reports Morningstar senior analyst Debbie Wang. We think this dividend-growth stock looks attractive as it trades 12% below our $112 fair value estimate.
Ex-dividend date and dividend per share for Medtronic.
Duke Energy
- Morningstar Rating: 4 stars
- Morningstar Economic Moat Rating: Narrow
- Forward Yield: 3.33%
- Sector: Utilities
Duke Energy trades just 2% below our fair value estimate of $131; it’s also the only name on our list of undervalued dividend-growth stocks to buy from the utilities sector. Duke’s regulated utilities’ earnings cover its dividend well, says Morningstar senior analyst Andrew Bischof. We expect 4% average annual dividend growth as management directs additional cash flows to growth investments.
Ex-dividend date and dividend per share for Duke Energy.
Mondelez International
- Morningstar Rating: 4 stars
- Morningstar Economic Moat Rating: Wide
- Forward Yield: 3.31%
- Sector: Consumer Defensive
The first wide-moat company on our list of undervalued dividend-growth stocks, Mondelez International is among the higher-yielding names on our list, too. Morningstar director Erin Lash expects the company to increase its dividend in the high-single-digit range on average annually through fiscal 2034, which implies a payout ratio of about 60%. This dividend-growth stock to buy trades 17% below our $73 fair value estimate.
Ex-dividend date and dividend per share for Mondelez International.
EOG Resources
- Morningstar Rating: 4 stars
- Morningstar Economic Moat Rating: Narrow
- Forward Yield: 3.34%
- Sector: Energy
The highest-yielding name on our list of cheap dividend-growth stocks to buy, EOG Resources trades 12% below our fair value estimate of $139. Morningstar director Josh Aguilar points out that EOG has paid a regular, growing dividend since becoming an independent company in 1999. And Aguilar expects EOG to have more than enough cash to continue covering both its fixed and variable dividend.
Ex-dividend date and dividend per share for EOG Resources.
Marsh
- Morningstar Rating: 4 stars
- Morningstar Economic Moat Rating: Narrow
- Forward Yield: 2.03%
- Sector: Financial Services
The first of two financial services stocks on our list of undervalued dividend-growth stocks to buy is Marsh. We expect the company’s future to largely resemble its past, says Morningstar senior analyst Brett Horn, which translates into moderate growth and attractive profitability. The company has been a reliable producer of strong free cash flow. We think the stock is worth $197, and it trades at a 10% discount to our fair value.
Ex-dividend date and dividend per share for Marsh.
Cigna Group
- Morningstar Rating: 4 stars
- Morningstar Economic Moat Rating: Narrow
- Forward Yield: 2.20%
- Sector: Healthcare
Cigna Group is trading 16% below our $338 fair value estimate. This top-tier pharmacy benefit manager and health insurer has carved out a narrow economic moat, and the company has made good progress on its deleveraging goals. “Cigna’s financial flexibility appears to have rebounded substantially since the Express Scripts merger was completed, and the company appears to be appropriately pushing more cash out to shareholders as a result,” explains Morningstar’s Utterback.
Ex-dividend date and dividend per share for Cigna Group.
Elevance Health
- Morningstar Rating: 4 stars
- Morningstar Economic Moat Rating: Narrow
- Forward Yield: 2.05%
- Sector: Healthcare
Elevance Health is one of the lower-yielding stocks on our list of bargain dividend-growth stocks. Like other health insurers on our list, regulatory challenges for 2027 are mounting for the company, including a new Medicare Advantage rate notice that was weaker than expected and Medicaid cuts, reports Morningstar’s Utterback. Nevertheless, we think Elevance’s balance sheet looks sound, and its distributions are appropriate. This dividend stock looks cheap, trading 29% below our $474 fair value estimate.
Ex-dividend date and dividend per share for Elevance Health.
Becton Dickinson
- Morningstar Rating: 4 stars
- Morningstar Economic Moat Rating: Narrow
- Forward Yield: 2.28%
- Sector: Healthcare
The final healthcare stock on our roster of undervalued dividend-growth stocks to buy, Becton Dickinson trades 18% below our $225 fair value estimate. Morningstar director Alex Morozov notes that the company is undergoing a course correction, whereby the firm is optimizing its portfolio. He adds that the company generates strong free cash flow to fund its dividend. Becton Dickinson is also a dividend aristocrat.
Ex-dividend date and dividend per share for Becton Dickinson.
S&P Global
- Morningstar Rating: 5 stars
- Morningstar Economic Moat Rating: Wide
- Forward Yield: 0.96%
- Sector: Financial Services
S&P Global rounds out our list of cheap stocks to buy with increasing dividends; it’s also a dividend aristocrat. We think the company is in a solid financial position as it targets a dividend payout ratio of 20% to 30%, observes Morningstar analyst Rajiv Bhatia. We currently assign a $570 fair value estimate to this dividend-growth stock; it’s trading 29% below that.
Ex-dividend date and dividend per share for S&P Global.
What Is the Morningstar US Dividend Growth Index?
The Morningstar US Dividend Growth Index focuses on companies with a history of dividend increases and an ability to maintain dividend growth.
The index includes US-based securities that pay qualified dividends and that have increased their dividend payments over the past five years. To gauge the durability of dividend growth into the future, eligible constituents must display positive consensus earnings forecasts from the analyst community and must also pay out no more than 75% of their earnings in the form of dividends. Constituents are weighted in proportion to the total pool of dividends available to investors.
Learn more about the Morningstar US Dividend Growth Index.
Dividend Increases and Economic Moats
Morningstar thinks that companies with economic moats have significant advantages that allow them to successfully fend off competitors for decades. Such high-quality companies can carve out their moats in a variety of different ways—by having high switching costs, through strong brand identities, or by possessing economies of scale, to name just a few.
Companies that we think can maintain their competitive advantages for at least 10 years earn narrow moat ratings; those we think can successfully compete for 20 years or longer earn wide moat ratings.
Of course, companies that do not have economic moats can exhibit dividend growth. But for the purposes of this article, we included only stocks that have narrow or wide moat ratings, choosing to place our bets with high-quality companies.
Cheap Dividend-Growth Stocks: More Ideas to Consider
Investors who would like to find more undervalued dividend-growth stocks to research further can do the following:
- Review the full list of stocks included in the Morningstar US Dividend Growth Index. Those dividend stocks with Morningstar Ratings of 4 or 5 stars are undervalued according to our metrics.
- Peek into the portfolios of some of the best dividend-growth-stock managers for new ideas. Some highly rated funds focused on dividend-growth stocks include Vanguard Dividend Growth VDIGX and T. Rowe Price Dividend Growth PRDGX.
- Use Morningstar Investor to build a watchlist of dividend growth stocks and create a view that allows you to easily follow the valuations, ratings, and dividend yields of the stocks on your list.