What's better than payday? A payday that you didn't have to work for. Owning dividend-paying stocks offer just that: a business working for you in the background, the fruits of which are realized via a quarterly paycheck. Even better than a dividend-paying company, though, is a business that spins excess cash off to investors and delivers business growth along the way. Such companies are likely to continue rewarding owners for a very long time.

It can be a potent combination, too, one that has averaged total returns (stock appreciation plus dividend payments) in the low double digits over the long term. In the search for great dividend payers and pay raisers, Starbucks (NASDAQ:SBUX), Store Capital (NYSE:STOR), and Hasbro (NASDAQ:HAS) belong on the list of must-haves.  

Coffee culture is here to stay

Let's start by getting the most familiar out of the way first. Though a staple of American culture, Starbucks is still a growth company -- and a dividend stock to boot with a yield of 1.9% as of this writing. That's not the biggest payout around, but it does include a 14% raise enacted this fall. The now $0.41 per share quarterly pay is more than triple what the coffee chain was doling out just five years ago.

How is Starbucks growing that payout so fast? It all goes back to balancing dividend checks with growth, and Starbucks figured out how to re-ignite sales here in the U.S. in the last year. During the 2019 fiscal year, U.S. comparable-store sales (which measures foot traffic and average guest ticket size) increased 5%. Its app and digital rewards program continue to be a big hit, as are seasonal drink rotations -- combining to drive profitable increases for the company in its most important market.  

And of course there's still the massive potential in China -- which is predominantly a tea-drinking society, but where coffee is catching on fast thanks to our subject company. Starbucks said comparable sales at existing stores grew 4% in the world's largest country in 2019, and its store count increased 16% from 2018. It plans to open thousands of new locations in China in the years ahead.  

It all adds up to one of the best stocks in the restaurant industry. Starbucks should continue paying -- and increasing -- its dividend for a long time. Shares are worth making a core holding in all types of investment portfolios.

A Starbucks coffee cup sitting on a wooden table top inside a store.

Image source: Getty Images.

A long-term real estate star in the making

For many investors (myself included), Store Capital showed up on the radar after Warren Buffett's Berkshire Hathaway made a $377 million investment back in 2017. The real estate investment trust (or REIT) has been growing fast, adding over 200 new properties (totaling 2,417 at the end of the third quarter) through the first nine months of 2019. Resulting revenues increased 25%, and adjusted funds from operations were up 23%.

Those are important metrics for a REIT like Store Capital, especially as funds from operations are ultimately what's used to pay dividends. This past fall, management announced a $0.02 per share hike to $0.35 a quarter, good for an annual yield of 3.4% and 40% higher than the initial quarterly payday when the company went public back in 2014. Store Capital's strong performance would suggest more raises are on the way.

Some investors might steer clear of real estate because of bad memories from the financial crisis of 2008/09. However, it's important to remember that no two economic downturns are the same. What led the way down last time will be different the next go around. Plus, Store doesn't dabble in high-risk loans. Instead, it owns single-tenant properties outright and leases them to business operators, with a focus on signing long-term deals with stable retail partners. During the Q3 report, management said 99.7% of its properties were occupied, the average new lease agreement was 17 years long, and three-quarters of its tenants were rated investment quality by rating agencies.

Put simply, Store Capital is a high-quality real estate portfolio, catering to high-quality tenants that aren't going anywhere anytime soon. With a solid dividend yield, good chance of future pay increases, and a growing property base, this one should continue to pay off for shareholders for a long time.

Betting on the future of playtime

The way kids are playing is changing. Digital interaction via TV, movies, and games is on the rise, and storytelling across these formats that extends into toys and merchandise is more important to kids than ever before. Hasbro knows a thing or two about that. Its Transformers franchise has enjoyed massive success, from the big screen to out of the box. 

Two illustrated Transformers, toys that can change from robotic soldier into a car or truck.

Image source: Hasbro.

Hasbro is also a merchandise partner for Disney, handling toymaking for properties like Frozen, Star Wars, and Marvel superheroes. Partner brand sales (read Disney) surged 40% higher during the third quarter, thanks in part to blockbuster movies like Avengers: Endgame, Frozen 2, and the upcoming Star Wars: The Rise of Skywalker. That's great news for Hasbro, but because of licensing fees, profit margins in this category are thinner than average.  

To re-create a little Disney-like magic of its own, Hasbro is scooping up studio and Peppa Pig and PJ Masks owner Entertainment One (OTC:ENTMF) for $4 billion. That's one hefty price tag, but it sets up Hasbro with another slate of brands it can tell stories with -- from TV screen to toy aisle. It also bolsters the company's existing stable of famous wholly owned names, like the aforementioned Transformers toys, Monopoly, My Little Pony, Power Rangers, and Play-Doh, to name just a few. This playtime empire is well entrenched in the lives of many young people.

Hasbro stock currently yields a 2.7% a year dividend and is handing out 45% more cash to owners of the stock than it was five years ago. Paired with its growth strategy focused on the future, Hasbro could be a good long-term investment.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.