Dividend investors are likely familiar with most stocks on the Dividend Aristocrats list, which are companies that have increased their payouts for at least the last 25 consecutive years. However, there are plenty of other excellent dividend stocks that aren't yet on that elite list. Many remain unknown, so income investors miss out on their steadily rising payouts.
Three under-the-radar stocks with outstanding dividend growth track records are MLP Delek Logistics Partners (DKL 1.22%), farmland REIT Gladstone Land (LAND 0.47%), and utility Xcel Energy (XEL -1.89%).
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Steady growth in a volatile industry
The oil patch has been a rough place for dividend investors in recent years. Continued volatility in oil prices has forced many companies to cut back on their dividend payments and redirect their cash flow toward reducing debt and funding capital projects.
That makes Delek Logistics Partners' current dividend growth streak stand out. The pipeline operator has increased its payout for 13 consecutive quarters, growing it by 5% over the past year despite all the oil market turmoil. That upward trend seems sustainable given the company's solid financial metrics. It's currently covering its payout by a comfortable 1.5 times and has a reasonable leverage ratio. With the recently completed Red River pipeline expansion expected to benefit its 2021 results, Delek Logistics should have the fuel to continue growing its payout, which currently yields an eye-popping 10.4%.
A steadily growing dividend
REITs are often great for dividend investors, as many pay steadily growing dividends. That has certainly been the case for investors in Gladstone Land. The company, which buys farmland and leases it to farmers, has paid 95 consecutive monthly dividends since its initial public offering in 2013. Even better, the REIT has increased its payout 21 times over the last 24 quarters.
That steady growth seems likely to continue. Gladstone Land bought $162 million worth of farmland in December alone, growing its portfolio to $1.2 billion of farms. Meanwhile, the company expects another strong year of acquisitions in 2021, which it kicked off earlier this month by purchasing a citrus orchard in California for $4.2 million. The company's steady stream of investments in rent-secured farms should enable it to achieve its goal of growing its 3.5%-yielding dividend at an annual rate that outpaces inflation.
Plenty of power to keep growing the payout
Utility stocks also tend to be ideal spots for dividend investors to unearth excellent payouts. One relatively unknown utility with a long history of dividend growth is Xcel Energy. The company, which supplies electricity and natural gas to eight western and midwestern states, has increased its payout for 17 straight years.
That streak seems likely to continue, powered by the company's focus on expanding its renewable energy efforts to achieve its ambitious plan to generate 100% carbon-free electricity by 2050. The company plans to invest billions of dollars over the coming years toward achieving that goal. It estimates that these investments should grow its earnings per share at a 5% to 7% annual rate, powering similar growth in its 2.7%-yielding dividend.
Great under-the-radar options for income-seeking investors
Delek Logistics, Gladstone Land, and Xcel Energy aren't household names. However, they've done an excellent job steadily growing their dividends in recent years. With those trends likely to continue, they're ideal stocks for dividend investors to put on their radar.
