Investing in dividend stocks has long been considered a savvy strategy for those looking to grow their wealth steadily over time. This approach is particularly effective when focusing on companies renowned for consistently raising their dividends. Historical data indicates that dividend-paying stocks have outperformed their non-dividend counterparts by more than two-to-one over extended periods.
Among the companies poised to continue increasing their dividend payouts are Brookfield Infrastructure, PepsiCo, and VICI Properties. Each of these firms has established a strong track record in enhancing their dividends, making them attractive options for investors looking to put their money to work.
Brookfield Infrastructure stands out with an impressive 16 consecutive years of dividend increases, with a compound annual growth rate (CAGR) of 9% during that time. Currently, the company offers a dividend yield of 4.2%, significantly higher than the S&P 500’s yield of 1.2%. A $1,000 investment in Brookfield would generate approximately $42 in annual dividend income. The company’s dividend sustainability is underpinned by stable cash flows, with about 85% of funds from operations (FFO) derived from long-term contracts or government-regulated structures. Brookfield retains a substantial portion of its cash flows, allowing it to reinvest in growth initiatives.
Looking ahead, Brookfield anticipates that a combination of inflation-driven rate increases, economic volume growth, and ongoing expansion projects will drive FFO per share growth by 6% to 9% annually. Additionally, recent acquisitions worth $1.3 billion are projected to enhance FFO per share growth to over 10%, integrating into a strategy that supports a consistent dividend growth rate of 5% to 9% per year.
PepsiCo’s dividend history is equally compelling, having increased its dividend for 53 consecutive years, earning it a place among Dividend Kings, an elite group of companies recognized for their sustained dividend growth. Over the past 15 years, PepsiCo has achieved a 7.5% CAGR in dividends, currently offering a 4% yield. The company’s growth strategy includes targeting organic revenue growth between 4% to 6% annually and driving core earnings per share growth in the high single digits.
PepsiCo’s commitment to innovation and its shift towards healthier product offerings have been bolstered through strategic acquisitions, such as the recent purchase of the prebiotic soda brand Poppi, enhancing its portfolio and facilitating continued dividend growth.
VICI Properties has also made significant strides, recording its eighth consecutive annual dividend increase at a CAGR of 6.6%, notably outpacing industry peers. With a dividend yield of 5.7%, VICI benefits from a robust portfolio of experiential properties secured under long-term triple net leases, generating stable rental income. As an increasing percentage of its leases are structured to escalate rents linked to inflation—rising from 42% this year to 90% by 2035—the company is well-positioned for consistent growth.
VICI conservatively allocates about 75% of its stable cash flows to dividends, allowing the REIT to reinvest in income-generating real estate ventures. Recent investments include a $510 million commitment to the Mono Casino and Resort project in California and a $450 million mezzanine loan for the development of One Beverly Hills, further solidifying its growth trajectory.
In conclusion, Brookfield Infrastructure, PepsiCo, and VICI Properties exemplify the synergy of resilient cash flows and active expansion strategies that not only sustain but are also likely to enhance their dividend payments. For investors seeking reliable income with growth potential, allocating $1,000 to any of these companies presents a promising opportunity.
