These Companies Pay Above-Average and Steadily Rising Dividends
Investing in dividend stocks can be an excellent strategy for generating passive income. Many companies offer enticing payouts that not only provide immediate returns but also have the potential for growth over time. Among these, Coca-Cola, Hormel Foods, and Four Corners Property Trust stand out for their robust dividend offerings. These companies not only provide above-average yields but have also demonstrated a consistent commitment to increasing their dividends year after year.
Quench Your Thirst for a Growing Income Stream
Coca-Cola, a household name in the beverage industry, currently boasts a dividend yield approaching 3%. This is significantly higher than the S&P 500’s sub-1.5% yield, making it an attractive option for income-seeking investors. What sets Coca-Cola apart is its impressive track record of dividend growth. Earlier this year, the company raised its dividend payment by 5.4%, marking the 62nd consecutive year of increases. This remarkable achievement places Coca-Cola in the elite category of Dividend Kings, companies that have raised their dividends for 50 or more consecutive years.
Looking ahead, Coca-Cola is well-positioned to continue this trend. The company anticipates organic revenue growth of 4% to 6% annually over the long term, with earnings per share expected to rise by 7% to 9% each year. Coupled with its strong financial position, Coca-Cola’s growing free cash flow will likely support ongoing dividend increases, ensuring that investors can continue to enjoy a reliable income stream.
Keeping Income Investors Satisfied
Hormel Foods is another standout in the dividend-paying arena, currently offering a yield of 3.5%. This global branded food company has a long history of rewarding its shareholders, recently celebrating its 96th year of uninterrupted dividend payments. Hormel has also increased its dividend for 58 consecutive years, showcasing its commitment to returning value to investors.
The company’s financial health further supports its generous dividend policy. Hormel generated nearly $860 million in net cash from operating activities in the first nine months of this year, comfortably covering its approximately $460 million in dividends. With a solid balance sheet that includes around $550 million in cash and equivalents against less than $3 billion in long-term debt, Hormel has the flexibility to pursue growth opportunities. This includes making strategic acquisitions and investing in product innovation, all of which can contribute to long-term earnings growth and sustained dividend increases.
Serving Up a Plate Full of Dividend Income
Four Corners Property Trust, a real estate investment trust (REIT), currently offers an attractive yield of 4.5%. This REIT specializes in owning properties leased to restaurant operators, providing a unique angle for income investors. Formed in 2015 when Darden Restaurants spun off some of its real estate, Four Corners now owns over 1,150 properties leased to more than 150 brands.
Darden Restaurants remains a significant tenant, contributing 35% of its rent from Olive Garden and 10% from Longhorn Steakhouse. However, Four Corners has been actively diversifying its portfolio. Recently, it acquired 19 properties from Bloomin’ Brands, which includes popular dining establishments like Outback Steakhouse and Carrabba’s Italian Grill. This diversification strategy extends beyond restaurants, as the REIT has also ventured into other retail sectors, including auto service and medical retail.
Four Corners Property Trust has consistently increased its dividend since its inception, raising its payment every year since 2017. The REIT’s ongoing acquisition of income-producing properties fuels its rental income, enabling it to reward shareholders with higher dividends.
Satisfying Your Appetite for Income
Coca-Cola, Hormel Foods, and Four Corners Property Trust are exemplary choices for investors seeking dividends that significantly exceed the S&P 500 average. With their strong histories of dividend growth and solid financial foundations, these companies offer a compelling opportunity for those looking to enhance their passive income streams. Whether you’re a seasoned investor or just starting, these dividend-paying stocks can help satisfy your appetite for reliable income.