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Income investing isn't a matter of trying to capture short-term gains. Some of the best performing dividend stocks fueled their market-beating returns by growing their sales at above average rates repeatedly for many years.
Keeping this in mind, here is a snapshot of some of the dividend stocks that have seen the greatest average annual revenue growth over the past decade.
|
Company Name |
Market Capitalization |
Dividend Yield |
Total Revenues, 10-Year CAGR |
|---|---|---|---|
|
WisdomTree Investments |
$1.4 billion |
3% |
84.1% |
|
Welltower |
$24.0 billion |
5.2% |
29.8% |
|
Gilead Sciences |
$94.2 billion |
2.6% |
27.7% |
Data source: S&P Global Market Intelligence
Some of these names will look familiar, while some are perhaps new. Read on to learn more about each company's individual investment thesis and whether each looks like a buy today.
WisdomTree Investments
While the ETF innovator's stock price has been up and down in recent years, the overall direction of WisdomTree Investments' (WT -1.34%) underlying business has been positive. The liquid nature of its ETF products will always influence its financial performance. In good times, investors can pile into its products, which proves beneficial to the company's financial performance. When one more of the asset classes covered by its ETFs fall from favor, though, results can suffer during periods of heavy investor withdrawals, as was the case in its most recent quarter.
Looking to the big picture, though, WisdomTree Investments has shown a remarkable ability to launch innovative (and wildly popular) new products, and the company remains focused on executing its savvy international expansion. Its results will be lumpy, but as its impressive sales growth suggests, WisdomTree Investments is indeed a company built for the long term. Its above-average dividend yield doesn't hurt, either.
Welltower
Healthcare REIT operator Welltower (WELL 0.83%) has benefited from the rise in demand for private-pay senior care and outpatient medical real estate facilities. The continued aging of the baby boomer population should drive greater demand for healthcare facilities, which means Welltower is well positioned to continue its impressive sales growth for years to come.
Welltower management continually reshuffles its property portfolio, selling off $3.3 billion in assets during the quarter and $1.4 billion in new additions. While this approach helps keep Welltower's holdings in tip-top shape, churning its portfolio can also limit the company's ability to grow the pass-through funds that form the basis of its dividend payments. Case in point: The company slightly reduced its full-year fund from operations (FFO) guidance to grow between 3% and 4% this year as the result of some changes to its 2017 portfolio strategy. While that's not negative, it's important to remember that, as a REIT, Welltower's FFO drives its dividend payments. At the end of the day, though, Welltower is an interesting dividend play that's ideally positioned to thrive as spending on elderly-care facilities rises for the foreseeable future.
Gilead Sciences
Longtime Fool favorite Gilead Sciences (GILD 0.07%) has been hammered of late as a result of investors' concerns over the company's aging hepatitis C business, which has been a cash cow for the business for some time. That's indeed a legitimate risk for the company, but one that shouldn't truly come home to roost for a few more years. Meanwhile, the company's 6.5 P/E ratio is the financial equivalent of being marked for death, which is by no means the case for Gilead today; analysts expect a far softer 2.4% annual contraction in EPS over the next five years. It seems reasonable that management will take action to remedy its flagging growth in the coming years.
It might take multiple acquisitions to do so, but, thankfully, Gilead's balance sheet -- with its $31 billion cash balance -- affords the pharma giant the ability to aggressively engage in M&A to bolster its pipeline. While it works to reboot its portfolio, the company can in effect pay its shareholders to wait through its dividend and share buybacks. Given its lack to a clear catalyst, Gilead Sciences carries some important risks in the here and now. However, the company has been able to successfully navigate similar situations in the past, and it seems plausible that it can do so again, which makes it an intriguing candidate to buy today.
