3 Stocks With Growing Payouts to Fulfill Your Dividend Dreams
Dividend investors love payday, and it comes quite often if you have enough stocks in your portfolio. Some dividend investors set up their portfolios to receive at least one payout every month.
Many companies raise their dividends each year and reward dividend investors who hold onto their shares. However, some corporations raise their dividends higher than others. Growing payouts accompanied by respectable stock price appreciation is a winning formula for many dividend investors.
These dividend dream stocks with growing payouts look promising for long-term investors.
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Broadcom (AVGO)
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A recent surge fueled by artificial intelligence (AI) has left Broadcom (NASDAQ:AVGO) with a lower dividend yield. Broadcom had a 3% dividend yield at the start of 2023 but has since seen its yield drop to 2%.
Broadcom’s dividend yield only dropped significantly because the company’s stock price shot up by 65% year-to-date. AVGO shares have more than tripled over the past five years. The chipmaker will tap into new opportunities through its recently approved acquisition of VMware.
Broadcom does a good job of raising its dividend by 10% or more each year. It’s been doing that for several years. The company has enough profits, available cash and business growth to sustain those types of dividend hikes in the future.
Broadcom trades at a reasonable 28 P/E ratio, which gives new investors a decent margin of safety. The corporation regularly posts profit margins of over 30% and provides essential chips. Semiconductors are in all types of technology and appliances, which will fuel Broadcom’s dominance in the years to come.
Stag Industrial (STAG)
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Stag Industrial (NYSE:STAG) is a real estate investment trust that focuses on storage and warehouse facilities. Many corporations rely on Stag Industrial’s properties to store inventory and commit to long-term leases.
That dynamic has helped the company generate reliable cash flow for investors. While most dividend stocks pay a quarterly dividend, STAG investors receive extra cash each month. That allows you to reinvest the proceeds and grow your cash even faster. You can also consistently use STAG to cover some of your monthly living expenses knowing you will continue to receive payments.
Stag Industrial isn’t the type of stock to beat the market. It’s only up by 12% year-to-date and 35% over the past five years. Those gains do not include the company’s 4.1% dividend yield, leaving much to be desired for growth investors.
Stag Industrial can help investors who want to insulate risk and receive consistent monthly payments. The REIT raises its dividend each year.
Prudential (PRU)
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Prudential (NYSE:PRU) is another top choice for dividend investors willing to trade gains for a higher margin of safety. Shares are down by 2% year-to-date and up by 14% over the past five years.
Prudential has been serving clients for almost 150 years and offers a juicy 5% dividend yield. Prudential started 2023 by raising its dividend from $1.20 to $1.25, marking a 4.2% year-over-year increase. It’s not the highest jump among dividend stocks, but investors already get a high yield from the stock. Prudential is due to raise its dividend in February 2024.
The company is in the middle of cost-cutting to further insulate itself from economic uncertainty. Cutting costs can help the company further support its dividend and possibly generate upside, although the dividend is the main focus.
Prudential’s low volatility makes it an enticing choice for dividend investors who also sell covered calls to generate additional income. Investors may want to wait for Prudential to drop a bit before accumulating shares.
On this date of publication, Marc Guberti held a long position in AVGO. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Marc Guberti is a finance freelance writer at InvestorPlace.com who hosts the Breakthrough Success Podcast. He has contributed to several publications, including the U.S. News & World Report, Benzinga, and Joy Wallet.
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