With inflation surging, everything costs more these days. It's even more challenging for those whose income isn't also rising to help cover the increased costs. Because of that, you might want to consider investing in dividend stocks with great growth track records if you haven't gotten a raise in a while, either at work or through your passive income sources.
Three dividend stocks that recently gave their investors big raises are Energy Transfer (ET), EastGroup Properties (EGP 0.79%), and Intuit (INTU -0.67%). All three companies should be able to continue growing their payouts at above-average rates, making them great ways to help relieve some of inflation's sting.
1 A high-octane dividend
Energy Transfer offers investors a big-time passive income stream. The master limited partnership (MLP) currently yields 7.6%.
The energy company's high-yielding payout is on solid ground. Energy Transfer's pipeline operations generate relatively stable cash flow backed by long-term contracts and regulated rates. Meanwhile, it produced enough cash flow to cover its prodigious payout with nearly $1.2 billion to spare in the second quarter. That gave it the funds for its entire growth capital spending program with cash left over to strengthen its solid balance sheet.
With its financial profile improving, Energy Transfer has been returning more cash to its investors. This year, it has already given them three raises, boosting its payout by 50%. Meanwhile, it aims to return it to its former peak. That implies the potential for it to rise by another 30%. It could continue to increase beyond that level as the company completes its growing pipeline of expansion projects.
2. Steadily giving back more cash
EastGroup Properties has been an excellent passive income stock over the years. The real estate investment trust (REIT) recently declared its 171st consecutive dividend payment. Overall, the warehouse owner has increased or maintained its dividend for 30 straight years, boosting it in 27 years, including the last 11.
The REIT recently gave its investors a 13.6% raise. That's the third sizable boost in the past year. EastGroup also gave investors a 22.2% raise last December and a 13.9% increase in August 2021.
It should be able to continue growing its dividend at a healthy rate. Demand for warehouse space is exceptionally strong these days. That's driving up rental rates and occupancy at its properties. Its portfolio was 99.1% leased at the end of June, while rents on new and renewal leases skyrocketed by 37.2%.
EastGroup also has a strong financial profile, giving it the flexibility to make acquisitions (it bought industrial real estate company Tulloch in the second quarter) and complete development and redevelopment projects. That combination of rent growth and an expanding portfolio should enable EastGroup to continue growing its dividend.
3. Small but mighty fine growth
Intuit offers a lower dividend yield that's currently around 0.6%. But the financial technology platform has done an excellent job growing its payout since it initiated a dividend in 2011. Intuit recently gave investors a 15% raise. The company has increased its dividend every year, growing it by 420% overall since starting the payout.
The company should be able to continue its rapid dividend growth. It generates lots of cash and has a strong balance sheet. That gives it plenty of post-dividend cash flow to expand its operations and repurchase its stock. Intuit has completed two needle-moving deals in recent years (Credit Karma and Mailchimp), which should drive accelerated increases through at least 2025. It aims to raise its revenue at a double-digit annual pace, which could support similar growth rates for earnings and dividends.
Inflation-beating income growth
The U.S. inflation rate is hovering around 8.5%, a four-decade high. One way to beat that impact is by investing in dividend stocks that can grow their payouts faster, like Energy Transfer, EastGroup Properties, and Intuit. All three have given their investors sizable raises this year, which they seem likely to continue doing for the foreseeable future.