Some companies do an exceptional job at paying dividends. They deliver an above-average income stream to their investors that they consistently grow.
Five high-yielding dividend stocks with exceptional growth track records are Blackstone (BX -1.86%), Enterprise Products Partners (EPD -1.86%), ONEOK (OKE -1.08%), Verizon (VZ 0.98%), and W. P. Carey (WPC -1.75%). They all offer attractive dividends yielding more than 5% (well above the S&P 500's 1.7% dividend yield) that they should be able to continue growing in the future. That combination of income and growth makes them great dividend stocks to buy hand over fist these days.
Trending higher
Blackstone offers investors an innovative dividend. The leading alternative asset manager returns the bulk of its earnings to investors each quarter through share repurchases and dividends. That means its dividend payments fluctuate from quarter to quarter. Over the last 12 months, Blackstone's total dividend outlay has given it a 5.6% dividend yield at its recent price.
While Blackstone's dividend varies each quarter, it has grown significantly over the years:
Data source: Blackstone. Chart by the author.
That payout should keep growing in the future. Investors continue to pour capital into alternative investments. The company sees a massive and largely untapped market to bring alternative investment products to high-net-worth investors. That should drive continued growth in its fee-related earnings, providing Blackstone with more money to pay dividends.
The fuel to continue growing
Enterprise Products Partners currently offers a monster yield at 7.5%. The energy master limited partnership (MLP) supports its big-time payout with stable cash flow and a top-notch financial profile. Its diversified energy midstream business produces steady earnings backed by long-term contracts and government-regulated rate structures. Meanwhile, it pays out a conservative portion of its cash flow from operations (56%) to support its distribution. Enterprise also has a top-tier balance sheet.
That strong financial profile allows the company to fund expansion projects and acquisitions. It currently has $5.5 billion of organic expansions under construction and more in development. Those projects give it lots of visibility into its growth. Because of all these factors, Enterprise Products Partners should be able to continue increasing its distribution. It has grown its payout by 5.4% over the past year and given investors a raise for 24 straight years.
Cashing on its completed expansion phase
ONEOK has delivered dividend stability for more than 25 years. While the pipeline company hasn't increased its payment every year, it has grown at a 13% compound annual rate since 2000. The company offers an attractive yield that's currently around 5.5%.
ONEOK should be able to continue growing its payout in the future. The company has significant earnings power from the $5 billion of expansion projects it has placed into service in recent years. They position it to capitalize on growing volumes as oil and gas producers increase their output in the future. With minimal capital needs following that major expansion phase and a solid balance sheet, ONEOK should have the free cash flow to grow its already sizable payout.
Sector-leading consistency
Verizon generates a tremendous amount of cash. The telecom giant produced a prodigious $37.1 billion cash flow from operations last year. This money funded its $23.1 billion in capital expenditures (including building out its 5G network) and $10.8 billion in dividend payments, with $3.3 billion to spare. That enabled the company to reduce debt and maintain a strong investment-grade balance sheet.
Verizon's robust cash flow enables the company to pay an attractive dividend (it currently yields 6.5%) that it steadily increases. The company gave its investors a modest raise last September, marking its 16th straight year of increasing the payout. That's the longest current streak in the U.S. telecom sector.
Positioned to continue growing
W. P. Carey has also consistently increased its payout, which yields an attractive 5.1% right now. The diversified REIT has given its investors a raise at least once each year since its initial public offering in 1998. That steady growth should continue.
The REIT is currently getting a big boost from inflation-escalation clauses in its leases. They should help drive above-average rent growth into 2024. In addition, the company has a strong investment-grade balance sheet (it recently received a rating upgrade, showcasing its financial strength), giving it the flexibility to continue acquiring income-producing real estate. W. P. Carey invested $1.42 billion on new properties last year and entered 2023 with a strong deal pipeline of over $500 million of opportunities.
Top-notch dividend stocks
Blackstone, Enterprise Products Partners, ONEOK, Verizon, and W. P. Carey are exceptional dividend stocks. They all have a long history of growing their dividends. They should be able to continue increasing their above-average payouts in the future. That positions them to produce attractive total returns, making them great income stocks to buy right now.
