What do income investors like better than a stock that pays a juicy dividend yield? The answer is easy: A stock with a juicy dividend yield that's likely to grow its dividend payout over time.
Such stocks aren't as hard to find as some might think. Here are three high-yield dividend stocks to buy now that have increased their dividends for 25 years or more.
1. AbbVie
AbbVie's (ABBV -0.89%) forward dividend yield of over 3.2% isn't as high as it was earlier this year. However, that's because the big pharma stock has soared almost 25% in 2024. But AbbVie still meets my definition of high yield, which is any yield at least two times greater than the yield of the S&P 500.
Few companies can touch AbbVie's dividend track record. The company has increased its dividend for an impressive 52 consecutive years, making it part of the elite group known as Dividend Kings.
But should income investors be concerned about AbbVie's declining earnings? Nope. The company continues to feel the sting of the loss of patent exclusivity for its top-selling autoimmune disease drug Humira. However, AbbVie is in a great position to bounce back quickly.
Sales for Humira's successors, Rinvoq and Skyrizi, are skyrocketing. AbbVie's 2020 acquisition of Allergan is paying off with strong momentum for products including antipsychotic drug Vralyar and migraine therapies Qulipta and Ubrelvy. The company's recent acquisitions of Celcius Therapeutics and Landos Biopharma also further bolster its already promising pipeline.
2. Enbridge
If you want to receive especially hefty income, check out Enbridge (ENB -0.36%). The energy company's forward dividend yield tops 6.8%. Its dividend yield has stayed above 5% since early 2018.
Enbridge has increased its dividend for 29 consecutive years. With a distributable cash flow payout ratio typically between 60% and 70%, I fully expect the company to keep that streak of dividend hikes going.
I've long viewed Enbridge as primarily a midstream powerhouse -- and it is. The company operates pipelines transporting crude oil, natural gas, and other liquid hydrocarbons across North America. It also owns storage facilities, terminals, and other midstream assets.
However, Enbridge isn't only focused on the midstream energy arena. Its acquisitions are helping to make the company the largest natural gas utility in North America. Enbridge has also expanded into renewable energy, with multiple solar and wind farms in Europe and North America.
3. Realty Income
Realty Income (O -0.60%) stands out as another high-yield stock that income investors should love. It offers a forward dividend yield of nearly 5.3%. As a real estate investment trust (REIT), Realty Income must return at least 90% of its income to shareholders as dividends for its profits to be exempt from federal taxes.
Like Enbridge, Realty Income has increased its dividend for 29 consecutive years. The company has paid a dividend every month since its founding in 1969. Its management promises "to continue treating the dividend as sacrosanct to our mission."
Realty Income owns a highly diversified portfolio of properties. It has over 1,550 clients representing 90 industries. Around 36% of its rent comes from clients with investment-grade credit ratings. Roughly 90% of the REIT's total rent is largely recession-resistant.
The compound annual growth rate of Realty Income's total return since its listing on the New York Stock Exchange in 1994 is 13.5%. The company has delivered positive earnings-per-share growth in 27 of the last 28 years. This is the kind of performance that makes Realty Income a great high-yield dividend stock for income investors to buy.
