Don't Let Their Low Yields Fool You: 3 Dividend Stocks Worth Watching

The latest inflation report released on Nov. 10 offered some relief, with consumer prices rising 0.4% in October 2026, down from September's 0.6% increase. However, inflation remains a concern for income investors seeking to preserve their purchasing power.

As investors assess whether inflation will continue to moderate heading into the end of the year, they may also try to find bright spots when possible—including companies that are able to navigate around the pressures of rising costs.

For income investors, the risks are especially high—a flat payout actually means a pay cut in an inflationary environment. Companies able to pay distributions that grow faster than inflation can be a workaround here.

Because their yields aren't particularly high, Parker-Hannifin (NYSE: PH), Cintas Corp. (NASDAQ: CTAS), and KLA Corp. (NASDAQ: KLAC) may not be the first names that come to mind for dividend investors. However, their dividend growth records make them worth considering for investors seeking rising income alongside potential share-price appreciation.

PH: Quietly Building a 70-Year Dividend Growth Streak

$115-billion industrials giant Parker-Hannifin makes hydraulic and pneumatic equipment and other products for aerospace, climate control, manufacturing, and various additional applications. With a dividend yield of 0.85%, investors may overlook Parker-Hannifin's strengths as a payer of distributions.

However, the company has built a seven-decade history of consecutive dividend increases, one of the longest among S&P 500 companies.

The company's five-year annualized dividend growth rate of 15% and it manages to keep its dividends sustainable by utilizing only a modest portion of earnings and cash flow, giving Parker-Hannifin room to keep outperforming inflation.

Parker-Hannifin's operational success also supports the health of its dividend going forward as well. Earnings and revenue both topped analyst predictions for the first quarter of the company's fiscal 2027, ended Sept. 30, 2026. Indeed, the results were a fiscal Q1 record and included adjusted segment operating margin improvement of 120 basis points YOY on strong orders and backlog growth across segments.

Parker-Hannifin is thriving even despite high inflation, having boosted its full-year outlook and anticipating as much as $4 billion in free cash flow for the fiscal year.

CTAS: Strong Demand Supports Double-Digit Dividend Growth

Another industrials name, but with a very different focus: Cintas is known for uniform and workwear products and services, facility services, and fire protection.

The company has more than four decades of consistent dividend increases and pays a yield of 0.94% with a five-year annualized dividend growth rate approaching 8%.

For its latest quarter, Cintas delivered with nearly 11% YOY improvement to revenue, adjusted diluted earnings per share (EPS) growth of almost 16% YOY, and a record-high operating margin. The growth was thanks to multiple areas of Cintas' business but driven primarily by its first aid and safety services arm.

Dividend growth remains a priority for Cintas, which boosted distributions by 15.6% in the latest quarter even as it continued an ambitious share buyback program. Strong sales, supported by new business, increased demand from existing customers, and price increases, helped make those shareholder returns possible. Importantly, growth wasn't solely dependent on passing higher costs to customers, suggesting that underlying demand remains healthy even in an inflationary environment.

Going forward, investors will want to keep an eye on the company's acquisition of uniform services firm UniFirst, which remains held up in regulatory limbo but which is expected to close by the end of the calendar year.

KLA: Semiconductor Growth Powers a Rising Dividend

KLA provides critical process-control technologies used in the semiconductor manufacturing process.

The firm has some of the strongest dividend growth statistics investors are likely to find in the sector, including a 16-year history of increasing payouts and a five-year annualized growth rate of an impressive 17%. The company pays a dividend yield of 0.66%.

Despite volatility in the AI space, KLA has continued to be an essential player in semiconductors, leading to 29% YOY revenue gains last quarter and a record operating margin of 46.1%, on top of $1.3 billion in free cash flow.

Even with rising memory costs, KLA has kept its margins high and continues to see improvements to backlog. Still, investors should watch out for the company's reliance on China, particularly if trade tensions reignite, and the potential for reduced capital expenditures. Nonetheless, shares are up 25% year-to-date (YTD) on top of the company's easy-to-miss income component.

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