Investing in “dividend powerhouses” — companies with stellar dividend payments and growth histories — is a smart way to secure reliable income. These companies are known for consistently rewarding their shareholders with higher payouts.
Further, investing in dividend powerhouses adds stability to your portfolio, as these companies are mostly well-established and have a growing earnings base. Their track record of sustained earnings growth supports their share price and enables them to deliver decent capital gains in the long term.
Among the top dividend-paying companies, AbbVie (ABBV), Enterprise Products Partners (EPD), and Telus (TU) stand out for their resilient payouts and ability to grow dividends. Let’s explore why these dividend powerhouses could continue to reward their shareholders with higher annual distributions.
1. AbbVie (ABBV) – The Dividend Aristocrat
Dividend Yield: 3.2%
AbbVie, a well-established name in the biopharmaceutical industry, is renowned for its consistent dividend payments. As a Dividend Aristocrat, ABBV has increased its dividend payouts for at least 25 consecutive years. This impressive streak shows AbbVie’s financial strength, reliable cash flow, and commitment to rewarding shareholders.
- Business Strengths: AbbVie is a leader in developing advanced therapies in areas such as immunology, oncology, eye care, and neuroscience. Over the past decade, the company has brought multiple blockbuster treatments to market, generating billions in revenue. AbbVie’s robust pipeline, with therapies in various stages of development, sets it up for future growth. Additionally, the company’s strategic acquisitions are expanding its reach in high-growth markets, which should further boost its financial performance and ability to maintain its dividend payouts.
- Why It's Attractive: AbbVie has consistently enhanced its shareholders' returns and has increased its dividend by 285% since 2013. Further, AbbVie stock has gained about 24% year-to-date, outperforming the S&P 500 Index ($SPX). Investors seeking income and growth can consider investing in AbbVie stock. The 3.2% yield may not be the highest, but it comes with the peace of mind that the payout will likely continue and grow over time.
2. Telus (TU) – A Dividend Grower
Dividend Yield: 6.8%
Telus is a Canadian telecom giant offering a higher yield and boasting a solid dividend growth history. What sets Telus apart is its industry-leading customer growth and retention. With churn rates below 1% for the past decade, the company boasts one of the most loyal customer bases in the telecom industry.
- Business Strengths: Telus benefits from continued strong customer growth across its mobile and fixed services, driven by its ongoing investment in the PureFibre network and 5G deployment. Beyond telecom, Telus is diversifying into new industries such as cybersecurity, healthcare, agriculture, and consumer products. These ventures bring in additional revenue streams and boost its long-term earnings potential.
- Why It's Attractive: Telus stands out for its commitment to returning value to shareholders through its multi-year dividend growth program. Since 2004, the company has returned $26 billion to shareholders, with $21 billion of that coming through dividends. With a solid customer base, a stable financial position, and a reliable dividend program, Telus is an excellent choice for investors seeking both steady income and future growth opportunities.
3. Enterprise Products Partners (EPD) – The 7% Yield Superstar
Dividend Yield: 7%
For investors seeking a higher dividend income, Enterprise Products Partners stands out with its hefty 7% dividend yield. What makes this yield even more appealing is that it’s backed by long-term fee-based contracts and minimum volume commitments. These agreements add stability to the company's operations and provide consistent revenue streams, protecting it from fluctuations in commodity prices.
- Business Strengths: Enterprise Products Partners is a leading energy infrastructure company with a diversified mix of products and geographic locations. This diversity helps it weather various market conditions. Since 2017, EPD has grown its adjusted EBITDA at a CAGR of 8.7%, showcasing its financial strength. Additionally, the company maintains a low leverage ratio, which adds stability and supports its growth initiatives. Further, the company’s recent acquisition will likely enhance its midstream energy systems, boosting its distributable cash flow and providing a solid foundation for future growth.
- Why It's Attractive: EPD’s 7% dividend yield is highly appealing to income-focused investors, particularly those nearing retirement. With interest rates now on the decline, this high yield stands out even more. The company has a strong track record, having increased its dividend for 26 consecutive years at a CAGR of 7%. Its durable payouts and steady growth make it an excellent choice for those looking to generate reliable income.
Conclusion
Investing in dividend powerhouses like AbbVie, Telus, and Enterprise Products Partners offers a reliable way to secure steady income and long-term growth. These well-established companies have a proven history of consistently growing dividend payouts backed by solid financials and business strategies.
AbbVie stands out for its robust pharmaceutical pipeline and track record of dividend growth. At the same time, Telus offers a high yield and benefits from its loyal customer base and diversification into new industries. Enterprise Products Partners, with its 7% dividend yield, appeals to income-focused investors due to its stability and steady growth in the energy infrastructure sector.
By including these dividend leaders in a portfolio, investors can enjoy a blend of stable income, reduced risk, and the potential for capital appreciation over time.
On the date of publication, Amit Singh did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
