Are you seeking reliable income streams that can help to fund your living expenses in retirement? Then you've come to the right place.
The following businesses possess powerful competitive advantages that allow them to generate strong and steady profits, which they then use to reward investors with sizable cash payouts. Read on to learn more about them.
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Fun-fueled dividends
Cedar Fair's (FUN -0.47%) amusement parks have thrilled roller-coaster fans for decades. But retirees are likely to find its cash payouts even more exciting.
Cedar Fair is one of the largest regional amusement-resort operators in the world. Its 14 parks serve 26 million guests and generate more than $1.3 billion in revenue annually. These valuable assets also produce bountiful free cash flow, which, as a publicly traded partnership, Cedar Fair passes on to its unitholders in the form of a steadily growing cash distribution.
The amusement park leader has paid a cash distribution to its investors for 33 straight years, and its units currently yield a hefty 7%.
Infrastructure-powered income
Like Cedar Fair, Brookfield Infrastructure Partners (BIP 2.82%) is a publicly traded partnership with a strong history of investor wealth creation. Brookfield is one of the largest infrastructure companies in the world, with a diverse collection of high-quality assets spread across the globe.
Brookfield focuses its efforts on four main areas: utilities, transportation, energy, and data infrastructure. Think electricity lines, ports, natural gas processing plants, and cell towers. These businesses benefit from substantial barriers to entry; high replacement costs, long-term contracts, and regulatory protections help to insulate their cash flows from the competition.
Brookfield expects to grow its distribution by 5% to 9% annually. The company has increased its cash payout for 10 consecutive years, and its units currently yield 4.9%.
Less risk, more profit
CME Group (CME 0.59%) takes a different approach than Cedar Fair and Brookfield toward generating profits. As a securities exchange, it's an asset-light business that generates some of the highest profit margins in the public markets.
CME Group operates the world's largest exchange and clearinghouse for futures contracts. Futures help businesses and individuals manage risk in areas such as interest rates, foreign exchange, and agricultural commodities. As these financial products continue to grow more popular, CME Group stands to benefit.
Check out the latest earnings call transcripts for Cedar Fair, Brookfield Infrastructure Partners, and CME Group.
CME enjoys powerful competitive advantages in the form of network effects. The exchange's wide selection of products and unmatched liquidity are highly valued by traders. Each additional trader it attracts provides more liquidity, which attracts more traders, and so on. This virtuous cycle -- and CME's massive scale -- makes it difficult for its competitors to wrest away market share.
CME Group passes its bountiful profits on to shareholders via a steadily growing dividend stream. The stock currently yields 1.9% based on its regular quarterly payout. Additionally, CME Group also pays a special dividend that has historically boosted its overall annual dividend yield to more than 5%, making it one if the highest-yielding wide-moat stocks available in the market today.
