Investing in the stock market is a great way to build long-term, sustainable wealth. Dividend-paying stocks can be solid investments because these companies exhibit strong business models. Couple that with prudent capital management, and these companies can consistently reward investors with reliable dividends that grow over time.

Hartford Funds and Ned Davis Research analyzed stock returns based on their dividend policy. Over five decades, dividend-paying stocks have delivered an average annual return of 9.17%. In comparison, non-dividend payers have returned just 4.27%. Companies that initiate or grow their dividends delivered even better, returning 10.19%.

Not only that, but dividend growers exhibit less volatility relative to the broader market, making them ideal for those seeking stability and growth. Here are three excellent companies that have raised their dividend payout for three decades (or more!) that can provide a solid foundation for your investment portfolio today.

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Chubb

Chubb (CB 1.31%) is a powerhouse in the insurance industry. With operations spanning 54 countries, Chubb provides various types of coverage, including commercial and consumer property and casualty insurance (P&C), personal accident and supplemental health, life insurance, and reinsurance.

Last year, Berkshire Hathaway established a position in the insurer and purchased 27 million shares. It is now the ninth-largest holding in Berkshire’s U.S. stock portfolio. Under Warren Buffett, Berkshire has shown an affinity for investing in insurers. That’s because insurers have pricing power, allowing them to adapt to inflationary pressures in the economy.

Chubb stands out thanks to its breadth of insurance products and prudent underwriting ability across those products. In the highly competitive insurance industry, sound underwriting is vital to making money and growing profitability over time.

One key ratio investors can use to analyze insurers’ underwriting ability is the combined ratio. This ratio measures how much a company spends on expenses (like salaries and overhead) and claims costs relative to the premiums collected. Profitable insurers want a combined ratio below 100%; the lower the ratio, the more profitable their policies are.

Over the past 22 years, Chubb’s combined ratio has averaged 90.6%, well below the industry average of 99.7%. This stellar performance translates into underwriting profit and free cash flow, which means Chubb has more money to reinvest in its business or to reward shareholders through dividends and stock buybacks.

Chubb’s board of directors recently approved a 6.5% hike to its dividend, marking the 32nd consecutive year the insurer has raised its payout.

Aflac

Aflac (AFL 0.68%) is another major insurer that offers life insurance and supplemental insurance plans for employees and individuals. Its policies supplement medical insurance policies and include accident, cancer, critical illness, dental, vision, and short-term disability, just to name a few.

The last decade and a half have presented a challenging operating environment for a company like Aflac. During the low interest rate period in the 2010s, Aflac struggled with low returns on its fixed-income securities and bonds, which impacted its profitability. Lower interest rates also make certain products, like fixed-rate annuities, less attractive to customers.

The COVID-19 pandemic also had an outsized effect on life insurers, which faced higher payouts. However, the past few years have provided a better backdrop for Aflac as their claims costs have come down. The combination of improving claims costs and rising interest rates has been a tailwind for the stock, which has increased 85% since 2022.

Aflac is a stalwart of capital management and is well positioned to grow, especially if inflation and interest rates remain elevated. Inflation could persist due to structural reasons, such as persistent labor market tightness, fluctuating energy costs, the impact of global supply chain challenges, and the continuation of policies prioritizing domestic economic growth.

Aflac most recently raised its dividend payout by 16%, extending its impressive 42-year history of growing its dividend.

Cincinnati Financial

Thanks to their pricing power, insurers are well positioned to grow during inflation. They also grow well during economic expansion, which tends to be the case most of the time. This can make them solid investments that grow along with the economy while also providing investors with a hedge against inflation and higher interest rates.

Perhaps no insurer has as impressive a history of rewarding investors as Cincinnati Financial (CINF 0.51%). Like Chubb, Cincinnati Financial has displayed a history of solid underwriting. Despite some underwriting challenges in the early 2010s, Cincinnati Financial continued to grow its dividend payout — a testament to its strong balance sheet and capital management.

Last year was solid for Cincinnati Financial, which grew its earned premiums by 12% to $8.9 billion. Thanks to higher interest rates, investment income also grew by 15% to $1 billion.

The company recently announced it would raise its payout by 7.4%, giving the insurer an impressive 65-year streak of increasing its annual payout for investors. Only a handful of stocks have a longer history of growing dividends.