Because dividend investing has such an impressive track record of beating non-dividend-paying stocks, many investors buy Dividend Aristocrats for their portfolios. It’s not a bad strategy to begin with.

Dividend Aristocrats are stocks on the S&P 500 that have consistently raised their payouts for 25 years or more. Studies show stocks that initiate a dividend and then raise them over time have outperformed all other stocks over time. Yet, there are limits to the strategy.

As Walgreens Boots Alliance (NASDAQ:WBA) showed earlier this year, even dividend royalties can run into problems. The pharmacy chain had increased its payout for almost 50 years but slashed its dividend nearly in half because it ran into money troubles. AT&T (NYSE:T) cut its dividend in half when it spun off its entertainment division into Warner Bros Discovery (NASDAQ:WBD).

So, just focusing on how long a stock has raised its dividend is not enough. What investors need to do is focus on dividend growth stocks that can afford to keep making their payouts. Growing a dividend at double-digit rates and generating enough free cash flow (FCF) to maintain the payout ensures a business will keep sharing its wealth with investors.

The following seven dividend growth stocks also have the free cash flow (FCF) to back up the payments.

LVMH Moet Hennessy Louis Vuitton (LVMUY)

Luxury goods retailer LVMH Moet Hennessy Louis Vuitton (OTCMKTS:LVMUY) is one of the first dividend growth stocks to consider for your portfolio. The owner of Fendi, Dior and Dom Perignon has a 10-year compounded annual growth rate (CAGR) for its dividend of 12.59% while growing FCF at a 13.9% CAGR. FCF is important for dividend investors because that’s how companies support their payout. There are only five things a business can do with the cash it has left over after paying its bills and paying a dividend is one of them.

LVMH is one of the top stars in luxury retail, offering goods from apparel and watches to alcohol and textiles. While it tends to be recession-resistant, the company is not bulletproof. The rich can hold out much longer than the rest of us, but even inflation and high interest rates catch up with the uber-well-to-do, too. 

That’s the situation with LVMH, which reported slowing first-quarter sales. But that’s not surprising considering the huge growth it enjoyed last year in its first post-pandemic-free quarter. Because comparisons get easier later on, expect LVMH stock to rebound sharply. In the meantime, collect the quarterly dividend that yields 1.7% annually.

UnitedHealth Group (UNH)

Health insurer UnitedHealth Group (NYSE:UNH) is the next dividend growth stock investors should have on their list. It’s another recession-resistant issue because healthcare is something you can’t ignore, at least not for very long. Doctor visits, prescriptions and emergency services are all vital for survival, meaning the insurer will always be in demand.

That’s played out with UnitedHealth stock, which has grown its revenue, profits and dividend in excess of 10% annually over the past decade. The dividend had a 21% CAGR over that period, while its current FCF ratio at the end of 2023 was 10%.

UNH views home healthcare, in particular, as a driver of the company’s future growth. Its Optum health services unit will be a key component for its expansion. UnitedHealth, though, has been scooping up several services businesses related to the niche, including LHC Group and Amedisys (NASDAQ:AMED). However, the latter deal is getting scrutinized more closely by regulators. It is not essential to UnitedHealth Group’s outlook, even if the deal is quashed.

Dick’s Sporting Goods (DKS)

Outdoor action retailer Dick’s Sporting Goods (NYSE:DKS) continues building on its impressive record of dividend growth. Its average payout was 27% for the last 10 years, while it generated FCF at the white-hot rate of 33% annually.

Even when sales faltered, such as when it chose to get caught up in the gun control debate and eliminate firearms from its stores, Dick’s kept growing the dividend. A boycott by hunters and other shooting sports enthusiasts sent sales reeling for a year. However, Dick’s chose to focus on higher margin sales, such as baseball apparel and equipment, which eventually padded its bottom line. Firearms were a popular item but were a low-margin business.

Today, Dick’s business is robust. Net sales jumped 5% last year, generating gross profit growth of 35%. The retailer also raised its dividend by 10% to $1.10 per share each quarter.

Domino’s (DPZ) 

Pizza delivery specialist Domino’s (NYSE:DPZ) has a history of raising its payout at high double-digit rates for the past decade, but recently announced it was increasing the payout by nearly 25% this year. Business has been strong for the pizza shop as it floods the market with stores in a strategy it calls “fortressing.”

By creating a ubiquitous feeling about its presence, Domino’s keeps its stores uppermost in consumers’ minds when they want to order food away from home. It also saves on marketing costs, as one ad covers many stores. That’s how sales rose 4% in 2023, but profits increased 15%.

Domino’s has a near-20% CAGR for its dividend but also a better-than 12% increase in FCF. Like its big dividend hike last year, FCF surged over 25%, easily supporting the payout. With an FCF payout ratio under 35%, the pizzeria has plenty of room for future double-digit dividend increases. Look for Domino’s to grow its dividend for many years to come.

AbbVie (ABBV)

Pharmaceutical stock AbbVie (NYSE:ABBV) was granted Dividend Aristocrat status because it was spun off from Abbott Labs (NYSE:ABT) a decade ago. However, the offspring has gone on to outshine the former parent since then. Where Abbott Labs has a solid 9.6% dividend CAGR for the last decade, AbbVie has a 13.9% CAGR over the same period. Moreover, AbbVie is generating significantly more free cash flow as well. It produced $22 billion in FCF last year versus just $5 billion from Abbott Labs.

While Abbott’s record is still a testament to its own business and is a worthwhile stock to own, AbbVie is growing at a blistering pace and is even more attractive. It still produces mountains of cash, growing FCF at a 14% CAGR, it remains a stock to own now and for the long run. Even as sales of its blockbuster arthritis therapy Humira slowly ease up after losing patent protection, the pharma stock still has a portfolio of billion-dollar drugs that are taking its place.

Automatic Data Processing (ADP)

Payroll leader Automatic Data Processing (NYSE:ADP) may be a surprise stock for some. It seems such a sleepy business to have a decade-long run growing its dividend and FCF at double-digit rates. Some stocks become so well-known and are so commonplace that they simply blend into the background. Yet, ADP stock continues churning out profits and cash that pay for its dividend year in and year out.

While revenue has grown at just a 5% CAGR for the past decade, profit growth has doubled that and free cash flow grew nearly 10% annually. That’s allowed the payroll company to raise its dividend by over 11% a year almost in the shadows. In that vein, ADP raised the payout another 12% for this year.

Many investors will look at ADP’s 2.3% yield and scoff at buying it. What they need to realize is that 10 years ago, its payout was $1.79 per share. Over the years, the dividend has grown 287%, meaning an investor’s yield on cost would have nearly quadrupled as well. 

Home Depot (HD)

Last, but investors shouldn’t think of as least, is home improvement center Home Depot (NYSE:HD). Although the retailer gets overshadowed by rival Lowe’s (NYSE:LOW) 50-plus year history of increasing its own payout, Home Depot’s recent record of raising its dividend is worth noting.

Home Depot has a 17% 10-year dividend growth CAGR compared to 20% at Lowe’s. But Big Orange generated nearly twice as much FCF growth at 11.1% over that period as Big Blue did at 6.9%. Home Depot also generated $18 billion in FCF last year compared to $6.2 billion at Lowe’s. So, it is growing bigger cash flows faster, which is an impressive feat.

That’s likely because it has been the go-to location for professional contractors. Even in the face of rampant inflation that we’ve seen over the past few years, which dampened the enthusiasm for home improvement projects, the retailer was able to continuously raise its payout. There aren’t many businesses that could withstand the toll of high prices and high-interest rates, but Home Depot has stood tall through it all.

On the date of publication, Rich Duprey held a LONG position in WBA, T, WBD, LVMUY, ABBV and LOW stock. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.