Income investors love dividend stocks, but they also know they can't just pick any dividend-paying company. The most reliable companies find ways to pay steadily rising dividends year in and year out over the long run.
Many investors track dividend stocks by whether they make annual increases to their payouts, and knowing this, companies often make dividend increases at around the same time every year. So far in 2019, Visa (V -1.19%), Nike (NKE -1.91%), and Cintas (CTAS -1.12%) haven't yet delivered a dividend hike to their shareholders, but based on past practices, you can expect to see a payout boost sometime between now and the end of December.
A dividend that's everywhere you want to be
Visa isn't exactly the best example of a strong dividend stock, with a current yield that's well below 1%. But the payment processor and credit card giant has still put together a track record of raising its dividends, with 11 straight years of higher payouts. Its most recent hike came last November, with a 19% rise to its current quarterly distribution of $0.25 per share.
Image source: Visa.
The stock has performed extremely well this year, with investors appreciating the company's efforts to keep transaction counts and payment volume high and growing. The card giant has done a good job of building partnerships with key players in the financial industry, choosing to work collaboratively with several industry upstarts rather than trying to suppress their innovations. For instance, Visa and PayPal Holdings have had a partnership for several years under which both companies promote greater adoption of digital payment functionality and features.
So far, even tepid conditions in the global economy haven't put a big dent in Visa's numbers as electronic payments gain traction internationally. Visa could afford to deliver a nice dividend increase this year, and hopefully it'll do better than it did in 2018 to lift what shareholders can expect to receive.
Doing it with dividends
Nike has also been doing well lately, using its leadership position in athletic footwear and apparel to build on its past success. The company has fought back against competitive threats from domestic and international rivals, and stronger financial performance has been the result. In its most recent quarter, Nike saw double-digit gains in revenue on a currency-adjusted basis, and investors were pleased by earnings growth approaching 30%.
Nike's another stock that has been slow to embrace the trend toward paying healthy dividends. Even with the athletic giant's 10% boost to its payout in November 2018, the current $0.22 per share quarterly dividend gives Nike a yield of just under 1%. At some point, the company might well choose not just to extend a streak of annual increases that's currently at 17 years but also to make an outsize hike to send a message. Whether big or small, investors can expect Nike to make its move soon.
Uniformly good dividends
Last but not least, Cintas has taken advantage of the ongoing need for uniform rental and facilities services to build a strong business model. Dividend investors have reaped the rewards, with 36 straight years of rising payouts. Last year's dividend increase amounted to nearly 27%, taking the annual payout to $2.05 per share. Yet due to a soaring share price, not even that size of boost was enough to keep Cintas' yield from staying below 1%.
Favorable employment trends have helped a lot, and the company has done well both in attracting clients on its own and in working with other businesses to form collaborations that can benefit everyone involved. Yet it has been able to weather past recessions and other downturns in employment without jeopardizing its dividend. That's a big part of why dividend investors are comfortable with Cintas.
Combining growth and income
Most income investors look at high yields, so these three dividend stocks don't even come onto the radar for many people. Yet with such attractive growth prospects to go with current income, many investors are willing to cut these dividend payers some slack -- especially if they keep delivering rising payouts year after year.
