Dividend-paying stocks are the gift that keeps on giving. These companies give their investors steady dividend income that they can use to buy more stocks or pay their bills.
However, some dividend stocks are extra generous. They give their investors more money almost every quarter.
Five companies that have a history of lavishing their investors with more dividend income are Community Healthcare Trust (CHCT 1.55%), Delek Logistics Partners (DKL 0.66%), Enterprise Products Partners (EPD 1.51%), Gladstone Land (LAND 1.86%), and Realty Income (O 1.48%). This makes them great stocks to buy to enjoy the gift of more dividend income throughout the year.
A healthy payout
Community Healthcare Trust has increased its dividend payment every quarter since its initial public offering (IPO) in 2015. The healthcare REIT currently offers its investors a generous dividend yield of 6.3%.
That payout should continue rising in 2023 and beyond. Community Healthcare has a conservative financial profile, including a reasonable dividend payout ratio (71% of its adjusted FFO in the third quarter) and a solid balance sheet. That gives it the financial flexibility to continue acquiring income-producing healthcare properties as it expands its diversified portfolio.
Thirty-nine and counting
Delek Logistics Partners has increased its distribution to investors every quarter since the end of 2012, pushing its streak to 39 straight quarters. The master limited partnership (MLP) offers investors a generous payout of nearly 9%.
That big-time distribution should continue growing. The company recently closed its acquisition of 3Bear Energy, which will boost its income and enhance its energy midstream infrastructure.
Meanwhile, it has a solid financial profile. The MLP has a reasonable leverage ratio at 4.35 times after closing that deal and generated enough cash to cover its current distribution by a comfy 1.62 times last quarter. That gives it the financial flexibility to continue expanding its operations and distribution.
The fuel to continue growing
Enterprise Products Partners has increased its distribution to investors 74 times since its IPO in 1998. This year marks its 24th consecutive year of distribution growth. The MLP also offers a big-time payout, with a current yield of more than 8%.
The company has plenty of fuel to continue growing its payout. It currently has over $5 billion of expansion projects under construction that should enter service over the next few years and increase its cash flow. Meanwhile, it can easily afford to invest in those projects while growing its distribution.
It generated enough cash to cover its big-time distribution by a very comfy 1.8 times last quarter. Meanwhile, it has one of the strongest balance sheets in the midstream sector, with its 3.1 times leverage ratio below its 3.25 to 3.5 times target. These features give it tremendous financial flexibility.
A steadily growing dividend
Gladstone Land has increased its monthly dividend 28 times in the last 31 quarters, increasing it by 52.7% overall. The farmland REIT currently yields nearly 3%.
Gladstone strives to grow its dividend at a rate that outpaces the annual inflation rate. Drivers include embedded rent growth as lease rates escalate, participation rents (its share of a farm's profits), and acquisitions. It sees a significant opportunity to continue acquiring farms in sale-leaseback transactions with operators.
Living up to its name
Realty Income has increased its dividend 118 times since its IPO in 1994, including for the last 101 consecutive quarters. The REIT currently offers an attractive dividend yield of 4.7%.
The company should have no problem continuing to grow its dividend in the future. It has one of the most conservative financial profiles in the REIT sector, including a low dividend payout ratio of 76% of its adjusted FFO last quarter and one of the highest credit ratings in the sector. That gives it tremendous financial flexibility to continue acquiring income-producing real estate.
The gift of growing income streams
Community Healthcare, Delek Logistics, Enterprise Products, Gladstone Land, and Realty Income have been very generous to their investors. These companies have all steadily increased their dividends throughout each year. They should be able to continue providing their investors with more dividend income in the coming year and beyond. This makes them great stocks to buy for those seeking the gift of steadily rising dividend income.
