I’m self-employed, so I’m on my own when it comes to saving for retirement. I don’t have a pension plan or a 401(k) match to help me retire more comfortably. So I take a reasonably cautious approach with my retirement account. I strive to make investments that I firmly believe will grow my retirement nest egg over the long term.
That’s why I focus on dividend stocks. They are proven wealth creators. Over the past 50 years, the average dividend stock in the S&P 500 has delivered a 9.1% average annual total return, outpacing the 7.7% return of an equal-weighted S&P 500 Index. Meanwhile, dividend growers and initiators have delivered even higher total returns of 10.2%. That data has given me the confidence to load my retirement portfolio with dividend growth stocks.
I plan to add several more dividend growers to my retirement account this April, including Chevron (NYSE: CVX) and Rexford Industrial Realty (NYSE: REXR). Here’s why I believe they’ll help build my retirement nest egg.
A well-oiled, dividend-paying machine
Chevron has been one of the more durable dividend growers over the decades. The oil giant delivered its 37th consecutive annual dividend increase in 2024, raising its payout by 8%. That continued its recent trend of delivering above-average dividend growth. Over the past five years, Chevron has grown its dividend faster than the S&P 500 and more than twice the rate of its closest peer in the oil patch.
Chevron should have plenty of fuel to continue growing its payout at an above-average pace for the next several years. The oil company’s focus is on investing in its highest-return opportunities. That returns focus drives its view that it can grow its free cash flow by more than 10% annually through 2027 at $60 oil. (Crude is currently in the $80s.) That’s enough money to fund its capital program, grow its dividend, and repurchase shares at the low end of its $10 billion-$20 billion annual range. Meanwhile, Chevron has several upside catalysts, including higher oil prices and its pending acquisition of Hess. That roughly $60 billion deal would more than double its free cash flow by 2027 at $70 oil while extending its growth outlook into the 2030s.
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Meanwhile, Chevron is investing in…
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