Some companies are just better than others at paying dividends. They offer higher-yielding payouts that they steadily increase in good times and bad. They're the type of companies you can buy and forget.
Realty Income (O 2.12%), Johnson & Johnson (JNJ 3.65%), and Brookfield Infrastructure (BIPC 3.32%)(BIP 2.18%) have elite records of growing their higher-yielding dividends. They also have what it takes to continue increasing their payouts in the future. That makes them great dividend stocks to buy if you have a few hundred dollars of idle cash to invest right now. They can turn that money into a potential lifetime of growing passive dividend income.
The name says it all
NYSE: O
Key Data Points
Realty Income's mission is to deliver dependable monthly dividends to its investors that grow over time. With 657 consecutive monthly dividends paid since its founding and 130 dividend increases since its public market listing three decades ago, the real estate investment trust (REIT) has been very successful in achieving its mission.
Its dividend currently yields 5.7%. At that rate, it could turn every $100 invested into its stock into $5.70 of annual passive income. That cash flow stream should steadily rise in the future.
The REIT has built a portfolio that produces very stable rental income. It owns single-tenant net lease properties across the U.S. and Europe leased to many of the world's leading companies. Because net leases require tenants to cover all operating costs, including routine maintenance, real estate taxes, and building insurance, they produce very stable cash flow that rises each year as the leases escalate rents.
Realty Income also has a very conservative financial profile, including one of the best balance sheets in the REIT sector. That gives it the financial flexibility to continue acquiring income-producing properties. With trillions of dollars of commercial real estate suitable for net leases, the REIT should have no shortage of opportunities to continue growing its portfolio and dividend.
One of the healthiest dividend stocks around
NYSE: JNJ
Key Data Points
Johnson & Johnson is an elite dividend stock. The healthcare giant delivered its 62nd consecutive year of annual dividend increases last year. That kept it in the select group of Dividend Kings, a company with 50 or more years of dividend increases. Its payout currently yields 3.1%.
The company has one of the healthiest balance sheets in the world. It's one of only two companies with a AAA bond rating. This company, with more than a $390 billion market cap, has only $12 billion of net debt -- specifically, $37 billion of debt and $25 billion of cash. That's after deploying or committing to invest $32 billion over the past year into acquisitions.
Meanwhile, the company's healthcare business produces lots of cash. It generated $20 billion in free cash flow last year even after investing $17.2 billion in research and development to discover and test new innovative medicines and medical technology. That was more than enough money to cover the $11.8 billion it paid in dividends.
Johnson & Johnson's heavy investments position it to grow its earnings and cash flow in the future. That should enable the healthcare giant to continue increasing its dividend.
Ample growth still ahead
NYSE: BIPC
Key Data Points
Brookfield Infrastructure has increased its dividend for 16 straight years, every year since its formation. The company has grown its payout at a 9% compound annual rate during that period. Its dividend currently yields 5%.
The global infrastructure operator generates very stable cash flow to support its high-yielding payout. About 85% of its funds from operations come from regulated or contracted assets, with around 70% of those financial frameworks linking rates to inflation. As a result, Brookfield generates very stable and steadily rising cash flow.
Brookfield Infrastructure estimates that the world will need to invest a jaw-dropping $100 trillion over the next 15 years to maintain, upgrade, and build infrastructure to support the growing economy, which includes $8 trillion in AI-related infrastructure over the next three to five years. Brookfield expects to capture a proportional share of this investment opportunity. It currently has $8 billion of expansion projects in its backlog and another $4 billion under development. These investments position the company to grow its cash flow and dividends at healthy rates for years to come.
Consistent dividend stocks
Realty Income, Johnson & Johnson, and Brookfield Infrastructure have steadily increased their dividends over the years. That growth seems highly likely to continue, thanks to the durability of their businesses and their long-term growth prospects. They're dividend stocks you can confidently buy and hold for the long haul.
