How One Strategy Crushed the Market From 2020 to 2025

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When markets melt down, when fear spikes and confidence disappears, most investors run for cover. They flee to cash, pile into Treasury ETFs, and watch helplessly as Wall Street’s headlines whipsaw their portfolios. But a small group of disciplined income investors did something different from 2020 to 2025: they kept buying dividend growers. And five years later, they’re the ones with fatter portfolios, larger income streams, and a 299.6% cumulative return to show for it.

Let’s be clear. This wasn’t luck. This wasn’t a meme stock mania or a one-time bounce. This was the product of a time-tested, boring-as-hell strategy: buy companies with growing dividends, reinvest those payouts, and let compound interest and fundamentals do the rest.

From April 2020 through April 2025, the S&P 500 gained 77.9%. The Nasdaq, even with its AI-fueled rallies, rose 118.3%. The Russell 2000? A miserable 12.5%. Meanwhile, a portfolio of fundamentally sound, dividend-growing stocks put up just shy of 300%. In a world addicted to speculation, this portfolio proved that patient capital, deployed in companies that consistently reward shareholders, wins.

2020: Panic, Then Payoff

The pandemic knocked the market off its axis. Q1 2020 was a wipeout. But as the dust cleared, savvy investors went shopping for cash-flow machines. They found them in REITs like Arbor Realty Trust $ABR ( ▲ 2.8% ) , which doubled between April and July—buy price $4.55, exit $9.03. Arbor didn’t just survive the COVID crash. It raised its dividend mid-panic. That kind of confidence is what separates speculations from investments.

Capital Southwest Corp. $CSWC ( ▲ 1.08% ) , a business development company, surged 48% over the same quarter, helped by supplemental dividends and a resilient loan portfolio. Meanwhile, Mesabi Trust $MSB ( ▲ 5.07% ) tacked on 37% as its royalty streams held steady and iron ore prices rebounded. These weren’t sexy trades. They were cash-producing, shareholder-focused companies bought at fire-sale prices.

2021: Recovery Becomes Expansion

The market’s recovery broadened in 2021. Vaccines rolled out. Earnings rebounded. But the dividend portfolio didn’t just go along for the ride—it outperformed again. The strategy posted a 62.1% return, trouncing the S&P’s 28.7%.

Virtus Investment Partners $VRTS ( ▲ 0.62% ) delivered strong gains as AUM rose and dividends grew. Dover Motorsports $DVD ( ▲ 0.28% ) , a microcap with consistent capital return, ended up being acquired—rewarding its patient shareholders. Victory Capital Holdings $VCTR ( ▲ 0.72% ) kept delivering, thanks to smart acquisitions and regular payout increases.

2022: The Rate Shock Year

When inflation surged and the Fed finally acted, most investors got blindsided. The Nasdaq cratered, small caps imploded, and even the mighty S&P lost 18%. Our dividend growers? They eked out a gain.

Names like Penske Automotive $PAG ( ▲ 1.42% ) and SunCoke Energy $SXC ( ▲ 1.3% ) proved that in a high-rate, high-inflation world, boring and profitable wins. Penske’s dealer network and capital return plan made it a compounder. SunCoke’s steady payouts and exposure to real assets made it a safe harbor.

2023: Rebound on Fundamentals

By 2023, the world had adapted. The dividend portfolio surged again—this time by 31.3%. It wasn’t just chasing tech. It was riding real earnings growth, real dividend hikes, and real shareholder alignment.

Nexstar Media $NXST ( ▲ 0.21% ) , with its local TV dominance, raised dividends and bought back shares. VCTR kept grinding higher. And other small and mid-cap dividend payers followed. This wasn’t flash. It was discipline.

2024 to 2025: Volatility Again, But Income Held Firm

2024 added another 21.9% to the ledger, while early 2025 showed a small drawdown. But even as volatility returned in 2025—fueled by tariffs, rate jitters, and geopolitical fears—dividend stocks held the line better than tech or small caps. You still got paid. You still owned productive assets.

SunCoke held up. Penske slipped but kept raising its dividend. ITEX delivered quiet consistency. And the broader portfolio, while down single digits in early 2025, still handily beat the market’s decline.

The Final Tally

Let’s look at the scoreboard:

• 2020: +63.5%

• 2021: +62.1%

• 2022: +1.6%

• 2023: +31.3%

• 2024: +21.9%

• 2025 (YTD): -7.2%

• Cumulative: +299.6%

Compared to 77.9% for the S&P 500, 118.3% for the Nasdaq, and just 12.5% for the Russell 2000.

This wasn’t done with leverage. No options, no gimmicks. Just businesses with reliable earnings and a track record of raising dividends.

Conclusion: When You Get Paid to Wait, You Win

A dividend growth strategy works because it aligns capital with discipline. It rewards patience. It turns drawdowns into buying opportunities. And it gives investors real returns while they sleep.

Wall Street will keep chasing the next shiny object. But the smart money? It’s buying dividend growers at fair prices, compounding income, and letting volatility do what it always does—create opportunity.

That’s how you turn $100,000 into $400,000 while everyone else is still watching CNBC.

Here are the top ten qualifying dividend growth stocks today:

1. Penske Automotive Group $PAG ( ▲ 1.42% ) Penske Automotive Group is a leading international transportation services company that operates automotive and commercial truck dealerships across the United States and internationally. With a current dividend yield of 2.94%, Penske offers a solid income stream supported by strong earnings and consistent cash flow from its diversified dealership network. The company has a track record of dividend growth and capital returns, making it a stable pick for investors seeking exposure to the vehicle and parts sector while still prioritizing yield and shareholder rewards.

2. Genco Shipping & Trading Ltd $GNK ( ▲ 1.12% ) Genco Shipping operates a global dry bulk shipping fleet, transporting commodities like coal, grain, and iron ore. With an eye-catching dividend yield of 11.58%, the company is one of the highest-yielding names in the U.S. equity market. What’s more impressive is Genco’s long-term commitment to shareholders: its 5-year dividend growth rate clocks in at 64%, with a 1-year boost of over 65%. With shipping demand holding firm, GNK remains a powerhouse in yield-driven portfolios.

3. Saga Communications Inc $SGA ( ▲ 2.15% ) Saga Communications owns and operates broadcast radio and television stations, primarily in mid-sized U.S. markets. Its 8.75% dividend yield is notable for a media company and reflects strong cash generation and low capex. SGA has upped its dividend by 60% in the past year alone, and its 3-year dividend growth rate of nearly 50% shows consistency in rewarding shareholders despite a challenged advertising landscape.

4. SunCoke Energy Inc $SXC ( ▲ 1.3% ) SunCoke Energy, a leader in coke production for the steel industry, has a current yield of 4.91%. The company has maintained a disciplined capital return program with a 5-year dividend growth of 38.2%. With stable contracts and a unique niche in metallurgical coke, SXC delivers a strong mix of yield and inflation-resistant cash flow.

5. ITEX Corp $ITEX ( 0.0% ) Traded over-the-counter, ITEX operates a business-to-business barter exchange network. It might be off the radar for many investors, but its 4.76% dividend yield and 200% one-year dividend growth prove it’s serious about shareholder returns. With double-digit growth rates across 1-, 3-, and 5-year periods, ITEX is a sleeper hit for yield-focused microcap investors.

6. Nexstar Media Group Inc $NXST ( ▲ 0.21% ) Nexstar is the largest local television station operator in the U.S. Its 4.73% yield is well supported by strong advertising and retransmission revenue. With a 5-year dividend growth of 31.2% and steady 25% growth over the past year, NXST combines media scale with aggressive capital return. It’s a media play with a fortress balance sheet and dividend aristocrat ambitions.

7. Shoe Carnival Inc $SCVL ( ▲ 2.98% ) Shoe Carnival, a discount footwear retailer, offers a 3.21% dividend yield. The company has increased its dividend by 22.7% over the past year and maintains strong 3- and 5-year growth rates as well. It’s a niche retail name with a clean balance sheet, strong free cash flow, and a history of rewarding shareholders.

8. Voya Financial Inc $VOYA ( ▲ 0.51% ) Voya is a retirement, investment, and insurance solutions provider. With a 3.07% yield, Voya may seem modest, but its 41.7% one-year dividend growth rate and consistent upward trend over 5 years make it a high-quality financial stock for dividend investors. The company is executing well on buybacks and strategic divestitures while boosting shareholder payouts.

9. Victory Capital Holdings Inc $VCTR ( ▲ 0.72% ) Victory Capital is a fast-growing asset management firm. Its 2.97% yield is backed by a 74.6% five-year dividend growth rate—among the best in the financial sector. It’s been building both AUM and market share, and returning a growing portion of earnings to shareholders. This is a rare combination of growth and income in the asset manager universe.

10. Interparfums Inc $IPAR ( ▲ 1.53% ) Interparfums, a fragrance and beauty product manufacturer, is a standout in consumer packaged goods. With a 2.96% dividend yield and a 5-year growth rate of 39.1%, it’s one of the most consistent dividend growers in the space. The company has pricing power, brand recognition, and a long runway for international expansion—all while raising its payout steadily.

Before I leave you, a quick note: I recently restarted my community small-cap bank investing newsletter that I’ve run, in one way or another, for over a decade.

It’s a strategy that has earned three to four times the overall return of the stock market, with very few net down years going all the way back to 1999.

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