Stimulus checks are nice.
But steadily growing dividend checks are even better.
Businesses that hike their dividend payout on a consistent basis have the ability to:
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Protect investors from the ravages of inflation.
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Provide an ever-increasing stream of income.
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Outperform the stock market over the long term.
Let’s take a quick look at three stocks that significantly upped their dividend payout in recent weeks.
One of them could be the next perpetually growing income machine in your portfolio.
Microsoft (MSFT)
Leading off our list is software giant Microsoft, which pumped its quarterly dividend 11% yesterday to 62 cents per share.
Microsoft’s board of directors also approved a new share buyback program authorizing up to $60 billion in share repurchases.
The company’s shareholder-friendly capital returns continue to be backed by a well-entrenched position on the desktop (Windows and Office) and ever-increasing presence in public cloud computing (Azure), which translate into consistently healthy cash flows.
Over the past 12 months, Microsoft has produced a whopping $42.8 billion in free cash flow.
Microsoft shares currently sport a dividend yield of 0.8%, which isn’t high. But considering that giants like Alphabet and Amazon don’t yet pay a dividend, Microsoft might be a good way for risk-averse investors to gain exposure to the cloud computing space — maybe with some spare change.
Philip Morris International (PM)
With a quarterly dividend hike of nearly 2.6% last week, tobacco giant Philip Morris International is next on our list.
The Marlboro cigarette maker will now pay shareholders a quarterly dividend of $1.20 per share versus the previous rate of $1.17 per share.
Philip Morris has increased its annual dividend every year since going public in 2008, representing a total increase of more than 170%, or compound annual growth of 8%.
While the shares are up a solid 32% over the past year, there could plenty of room to run given Philip Morris’ massive scale advantages (it’s the world’s largest publicly traded tobacco company) and brand awareness. And with management’s ambitious goal to generate over half of its revenue from non-cigarette products by 2025, the company should see plenty of growth in the years ahead.
Philip Morris shares currently offer an attractive dividend yield of 4.7%.
Verizon Communications (VZ)
Rounding out our list is telecom giant Verizon, which increased its quarterly dividend to 64 cents per share, representing the 15th consecutive year that the company has approved a quarterly dividend increase.
“We continue to deliver value to our shareholders as we execute our multi-purpose network strategy and grow the top and bottom lines,” said Chairman and CEO Hans Vestberg.
Verizon shares are down about 12% from their 52-week highs set in November, but now might be a good time for income investors to take a closer look.
Verizon’s long-term investment case continues to be supported by significant scale advantages (largest customer base in the U.S.), industry-topping profitability, and still-attractive wireless growth tailwinds.
In the most recent quarter, Verizon’s wireless service revenue improved 6% over the year-ago period to $16.9 billion.
Verizon currently boasts a dividend yield of 4.7%.
Rising rental income, anyone?
There you have it: three attractive dividend growth to consider for the long haul.
While skyrocketing meme stocks are making all the news today, creating a steadily growing income stream should be job one for conservative investors.
Of course, you don’t have to limit yourself to the stock market to do that.
For instance, this investing service makes it possible to lock in a steady rental income stream by investing in premium real estate properties — from commercial developments in LA to residential buildings in NYC.
You’ll gain exposure to high-end properties that big-time real estate moguls usually have access to, and you’ll receive regular payouts in the form of quarterly dividend distributions.
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
