Those seeking the top dividend stocks 2014 has to offer are on a wise quest. Dividends, after all, can turbocharge a portfolio, generating welcome income in both rising and falling markets. Another thing to remember is that top dividend stocks in 2014 and any other year are likely to be sturdier than many other investments. That's because companies tend to commit to paying dividends only when they feel reasonably sure that they'll be able to keep paying them.
When it comes to finding top dividend stocks, 2014 is a great time to start, or continue, investing in dividend payers. Below are three compelling companies that stood out when I screened for significant dividend yields among companies with average three-year growth rates of 5% or more for both revenue and earnings.
Meridian Bioscience (NASDAQ:VIVO), which specializes in diagnostic tests, recently yielded 3.9%. Its dividend has been growing by an annual average of 4% over the past five years, and its payout ratio is a reasonable 65%, suggesting room for growth. Its current and forward-looking P/E ratios are both well below its five-year average, too. The company reported its second quarter last month, with revenue up 6% over year-ago levels and net income roughly flat. In March, it received FDA approval for a new molecular diagnostic test for Bordetella pertussis, which causes whooping cough, and this test is expected to boost sales in the second half of the year. The company's top line has been steadily growing, and it sports double-digit net margins and returns on invested capital. Its balance sheet features no debt.
Omega Healthcare Investors Inc (NYSE:OHI) recently yielded 5.5%. This top dividend stock for 2014 has been growing its payout by an annual average of 10% over the past five years. Its payout ratio is 121%, which is definitely on the high side, but the company has long treated its shareholders well, with its stock growing by an annual average of 10% over 20 years. Omega Healthcare is a real-estate investment trust, specializing in financing and the long-term care industry. As of the end of 2013, it owned or held mortgages on 538 skilled nursing facilities, assisted living facilities, and other specialty hospitals, spanning 37 states. They were operated by 49 third-party companies. The company's first quarter featured funds from operation rising 20% over year-ago levels and dividends rising for the seventh quarter in a row. In a conference call, management noted that competition has been intensifying and that "interest returns that we are getting on potential deals has gone down."
Enterprise Products Partners L.P. (NYSE:EPD) is another of the top dividend stocks of 2014. It recently yielded 3.9%, and its dividend has been growing by an annual average of 5% over the past five years. Its payout ratio is 96%, which, like that of Omega Healthcare Investors, is steep. Enterprise Products is a midstream energy master limited partnership, which means that it has special tax complications (and benefits) any interested investor should read up on. It's making money from some strategically placed pipelines and from exports of liquefied-natural-gas products such as propane and ethane. While bears worry about its debt and vulnerability to weather and price drops, bulls like its growth prospects related to our nation's need to upgrade our energy infrastructure.
The companies above are not the only top dividend stocks 2014 has to offer. Do your own screening for great candidates with our CAPS Stock Screener.
Top dividend stocks for the next decade
The smartest investors know that dividend stocks simply crush their non-dividend-paying counterparts over the long term. That's beyond dispute. They also know that a well-constructed dividend portfolio creates wealth steadily, while still allowing you to sleep like a baby. Knowing how valuable such a portfolio might be, our top analysts put together a report on a group of high-yielding stocks that should be in any income investor's portfolio. To see our free report on these stocks, just click here now.
Longtime Fool specialist Selena Maranjian, whom you can follow on Twitter, has no position in any stocks mentioned. The Motley Fool recommends Enterprise Products Partners L.P. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.