In a year marked by significant dividend cuts from well-established companies such as Walgreens and 3M, many investors might feel disillusioned about dividend stocks. However, there are still profitable opportunities available that demonstrate resilience and steady payouts. Let’s explore three noteworthy stocks that continue to provide reliable dividends, making them potential assets for income-focused portfolios.
Consistent Income with Enterprise Products Partners
Enterprise Products Partners (NYSE: EPD) has established an impressive legacy with 26 consecutive years of increased distributions. This midstream energy giant, structured as a master limited partnership, fundamentally prioritizes the returns of its investors. Not only does this structure offer potential tax benefits — as a portion of the income often constitutes a return of capital — but it is also backed by Enterprise’s robust business model.
The company owns and operates essential energy infrastructure, such as pipelines, storage facilities, and transportation systems. Unlike sectors heavily influenced by fluctuating oil prices, Enterprise benefits from a fee-driven revenue stream, allowing it to maintain stable cash flows regardless of oil market volatility. Its investment-grade balance sheet further enhances its reliability, with distributable cash flow covering distributions by a factor of 1.7. With a substantial yield of around 7%, it’s no surprise that this stock appeals to dividend investors looking for steady income growth.
Oneok: A Dividend Powerhouse
Oneok (NYSE: OKE) exemplifies reliability in the pipeline industry. Over the past quarter-century, it has maintained a strong track record of dividend stability. Although the company has not managed to increase its payouts every year, it has consistently outperformed many of its peers regarding total dividend growth, boasting a remarkable 150% increase since 2013, despite periods of oil price fluctuations.
Oneok has strategically invested in its infrastructure through both organic growth and acquisitions. The transformational $18.8 billion acquisition of Magellan Midstream Partners has positioned it for increased diversification and cash flow. This deal alone is projected to add over 20% to its free cash flow per share through 2027. Oneok’s management is optimistic about maintaining annual dividend growth of 3% to 4%, alongside share repurchases and a reduced debt ratio, ensuring it remains a strong choice for those seeking consistent dividends.
NextEra Energy: A Forward-Thinking Utility
NextEra Energy (NYSE: NEE), a leading player in the utility and clean energy sectors, has continuously prioritized shareholder returns. With a current yield of about 2.6%, it has rewarded its investors with a remarkable compound annual growth rate (CAGR) of nearly 10% in dividends over the last two decades. The company is committed to sustainably increasing its dividend, forecasting growth of around 10% annually until 2026.
This ambitious growth strategy is supported by substantial investments in both traditional utility infrastructure and renewable energy projects, totaling over $99 billion by 2027. With a major presence in Florida Power & Light and NextEra Energy Resources, the world’s largest generator of wind and solar energy, NextEra combines stable cash flow with expansive growth potential. This dual focus positions it to provide robust dividends, even in challenging market conditions.
The current market landscape has undoubtedly led to some disillusionment among dividend investors due to recent cuts from previously stable companies. However, stocks like Enterprise Products Partners, Oneok, and NextEra Energy not only continue to thrive but also offer a promise of substantial returns through resilient dividends. By including these companies in your portfolio, you can confidently navigate the uncertainties of the investment landscape while seeking steady income and potential growth. Don’t overlook these dividend payers that have proven their worth; they might be just what your investment strategy needs.