Data Centers and Security: 3 Rising Stocks Raising Dividends

Data centers and security are two of the hottest industries in the world right now, and three key companies that recently released their earnings are heirs. All three stocks have seen their prices move well since the start of 2025, and one is looking to increase its profits by more than 40%.

In a market where investors continue to seek both growth and income, these names stand out because their pay rises are supported by accelerating business fundamentals rather than financial engineering. Each company is in a different corner of the global economy, but they share a common thread: structural demand tailwinds that show no signs of abating.

TEL: Communications Leader Evolves As Data Center Demand Rises

TE Connectivity (NYSE: TEL) is a leading electronics company, providing solutions across the transportation, industrial, and data center markets. With a market capitalization of nearly $58 billion, TEL is one of the world’s ten most valuable stocks in the electronics, metals, and components industry.

The shares have delivered a strong return of more than 40% since the start of 2025, driven by the company’s growing role in the development of the artificial intelligence (AI) data center. TEL’s digital data networks business, which provides high-speed connectors and cabling to hyperscale data centers, grew 70% year-on-year (YOY) last quarter. The company now expects AI revenue in fiscal 2026 to be “billion dollars more” than its previous forecast, with growth coming from all of its hyperscaler customers.

Given its success, TEL is adding juice to its profits. TEL recently increased its dividend by 10%, moving its quarterly payout to 78 cents per share. This new dividend is paid on June 12 to shareholders at the close of business on May 22. The fund now has a reflected dividend yield of approximately 1.6%. While not very high, it stands firmly above the roughly 1.1% yield offered by the S&P 500 Index.

RHM: Europe’s Defense Powerhouse Plans + 40% Share Increase

Rheinmetall (ETR: RHM) is one of Europe’s largest defense contractors, providing armored vehicles, air defense systems, and other solutions. Shares in Rheinmetall have delivered a total return of close to 150% since the start of 2025, while RHM has benefited greatly from a major boost in European defense spending.

This comes as NATO allies have committed to increasing spending on defense and security to 3.5% of gross domestic product by 2035. Germany alone, which accounts for 38% of RHM sales in 2025, is planning nearly 650 billion euros (about $742 billion) in defense spending over the next five years.

These changes helped Rheinmetall’s sales to grow by 29% by 2025. Remarkably, this marked the company’s highest rate of revenue growth since 1997. The company’s operating margin rose 50 basis points to 18.5%, and its order backlog rose 36% to a record level. Rheinmetall expects 2026 to be even better, predicting revenue growth of 40% to 45%.

In response to the company’s strong performance in 2025 and its vision, Rheinmetall recently proposed a significant increase in the budget. Its annual dividend proposal of €11.50 ($13.12) per share would mark a whopping 42% increase on its previous payout. Shareholders will vote on the proposal at RHM’s Annual General Meeting on May 12. Assuming shareholders approve the dividend, which they usually do, RHM holds an implied yield of about 0.7%.

Defense Giant General Dynamics Raises Dividend After Strong 2025

General Dynamics (NYSE: GD) is an aerospace and defense company with a product portfolio that includes Gulfstream private jets, nuclear submarines, and Abrams tanks. Its market capitalization of nearly $95 billion makes GD one of the top ten most valuable aerospace and defense stocks.

Shares have delivered a total return of more than 35% since the start of 2025, driven by broad-based strength across GD’s business. Full-year revenue grew nearly 10% to $52.6 billion, well above its average annual growth rate of 5.4% over the past 10 years.

Marine Systems and Aerospace led the way, both seeing revenue rise by nearly 17%. The company ended 2025 with a record backlog of $118 billion, up 30% YOY, highlighting strong demand for its solutions. Combat Systems’ revenue growth was roughly 3%. However, orders increased significantly at the end of the year, driven by demand for European land systems. In Q4 2025, Combat Systems orders increased nearly 150% compared to Q3 2025 to $10.9 billion.

Adding to the good news is the company’s dividend increase of 6% every quarter. General Dynamics’ payout will rise to $1.59 per share, giving the stock a solid implied yield of about 1.7%. The company plans to pay its next dividend on May 8 to shareholders of record on April 10.

European Defense Restructuring Is an Opportunity for RHM

TEL, Rheinmetall, and General Dynamics all saw strong momentum in their businesses. Given its position at the heart of Europe’s defense reform, Rheinmetall is very interesting going forward. As Europe’s defense spending is still far from reaching NATO’s goals, the company has a strong long-term growth path.

Companies mentioned in this article:

Company	Current Price	Price Changes	Dividend Yield	The P/E ratio	Consensus ratio	Consensus Price Target
Rheinmetall (RHM)	€1,592.50	+2.7%	0.51%	125.88	N/A	N/A
TE connection (TEL)	$202.55	+1.6%	1.40%	29.19	Buy Medium	$251.93
General Dynamics (GD)	$352.05	+0.2%	1.70%	22.77	Buy Medium	$376.26

About Leo Miller

Experience

Leo Miller has been a contributing writer for DividendStocks.com since 2024.

• Professional Background: Leo Miller is a financial writer with a background in investment research and market analysis. He held roles as an investment research partner at Laird Norton Wetherby and as a research analyst at Sungarden Investment Publishing, where he gained extensive experience in valuation and portfolio strategies.
• Confirmation: He holds a Bachelor of Business Administration in Finance from the University of Washington’s Foster School of Business, a top-ranked public business school. Passed the CFA Level II exam.
• Financial Experience: Leo started researching and investing in gold mining stocks in 2019 and started writing about finance and investing in 2021. He joined DividendStocks.com as a contributing writer in 2024, where he covers both stocks and ETFs. A strong research base and direct exposure to the financial markets shape his opinions.
• Writing Focus: He specializes in technology stocks, dividend-paying companies, ETFs, and value-oriented opportunities. His work emphasizes clarity, practical understanding, and education for investors at all levels.
• How to Invest: Leo follows a disciplined, long-term investment strategy based on fundamental analysis, with a strong focus on economics, industry and sector research, and passive investment principles.
• Motivation: Leo finds the stock market endlessly compelling and enjoys the challenge of separating meaningful data from the noise. He is passionate about analyzing what makes businesses stand out—and sharing that insight to guide informed investment decisions. As he puts it, “Strong analysis requires separating the wheat from the chaff.”
• Fun fact: Leo credits his grandfather with sparking his interest in investing and is a lifelong animal lover.
• Areas of Expertise: Fundamental analysis, economics, industry and sector analysis

Education

Bachelor in Business Administration, Finance, Foster School of Business at the University of Washington