Most of the best dividend-paying stocks give their investors a raise each year. However, some companies go even further by boosting their payouts every quarter. Three that have well-established track records of quarterly dividend growth are MLPs Enterprise Products Partners (EPD +0.69%) and MPLX (MPLX 0.43%) and REIT W.P. Carey (WPC 0.48%). While some income-focused investors might be familiar with this trio, they're far from household names.
Here's a closer look at these fantastic dividend stocks.
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62 and counting
Enterprise Products Partners recently declared its 62nd consecutive quarterly distribution increase. That's more than 15 years of steady quarterly growth, though the company has boosted its payout at least annually for the last 21 straight years. That's an impressive streak, especially in the energy sector, where dividends often fluctuate as much as the price of oil.
One of the keys to Enterprise's ability to continue growing its payout even though it operates in that challenging sector is that it has consistently maintained a top-notch financial profile. The company currently has one of the highest-rated balance sheets in the energy midstream sector. On top of that, it generates relatively stable cash flow backed mainly by fee-based contracts and pays out a conservative amount of its cash to support its distribution, which currently yields 6.2%. Because of that, it has the financial flexibility to invest in high-return expansion projects.
This master limited partnership boasts one of the biggest growth backlogs in the sector these days. Because of that, it should have plenty of fuel to keep growing its payout each quarter for the next several years.
A monster yield backed by healthy metrics
MPLX hasn't been around quite as long as Enterprise. However, it has done an excellent job growing its distribution, with it recently announcing its 27th straight quarterly increase. All that growth has helped push up its yield to an eye-popping 10.3%.
When a payout reaches double digits, it's often a sign that investors believe a payout cut could be forthcoming. However, that doesn't seem to be the case with this MLP. That's because the company has a solid balance sheet backed by good credit metrics, and it covers its distribution with cash by more than 1.5 times. Further, MPLX recently reduced its capital spending rate so that it can remain in tip-top financial shape. Because of that, it has the financial flexibility to continue growing its payout should it choose to stay on its current path. Although, given how cheap its valuation is these days, the company might opt to reallocate some of the cash it planned to pay out to investors and use it to repurchase its units instead.
A milestone increase
W.P. Carey recently notched its 75th consecutive quarterly dividend increase. Add that nearly 19-year streak to the company's prior annual ones, and it has given its investors a raise for more than 20 straight years.
Two overriding factors have enabled the company to increase its dividend consistently. First, W.P. Carey focuses on owning and acquiring real estate backed by triple-net leases. These properties tend to have very high occupancy levels (96.6%-plus over the last decade) and long terms (the current weighted average lease term is 10.3 years). Because of that, it generates very predictable cash flow. Meanwhile, the company also maintains an investment-grade rated balance sheet with low leverage levels. That gives it the financial flexibility to continue buying new properties that grow its cash flow. Last year, for example, the company purchased $870 million worth of properties leased under long-term agreements with financially strong tenants. Those deals, and future ones it will likely make, should give W.P. Carey the incremental cash needed to continue increasing its 5%-yielding payout each quarter.
Treating income investors amazingly well
All three of these companies go the extra mile by giving their investors a raise each quarter. While that past success doesn't guarantee each one will continue extending their current streak, they have strong enough financial profiles to keep going. Because of that, they're ideal stocks for income-seeking investors.
