Investing in stocks that consistently increase dividend payouts can provide investors a reliable source of growing income over time. Further, a company's ability to regularly boost its dividends shows its solid financials and management’s confidence in future earnings.
Against this background, Verizon Communications (VZ) and TC Energy (TRP) stand out for their consistent history of dividend payments and growth. Moreover, these dividend growers offer high yields exceeding 6%. Their resilient earnings base suggests that these companies could keep increasing their dividends in the years ahead. Let’s take a closer look at these high-yield dividend stocks.
#1. Verizon Stock
Verizon (VZ) is a leading communications and technology player, providing data, video, and voice services. Recently, Verizon increased its quarterly dividend by 1.9% to $0.6775 per share. This brings its forward yield to over 6%, making it a compelling investment for investors to generate passive income.
With this latest increase, Verizon has raised its dividend for 18 consecutive years. This consistency reflects the company’s ability to drive revenue growth from its wireless services, expand adjusted EBITDA, and generate strong free cash flow. Notably, in the first half of 2024 alone, Verizon paid nearly $5.6 billion in cash dividends, showcasing its solid financials and commitment to rewarding its shareholders.
Verizon continues to maintain its leadership in 4G and 5G wireless technologies, an area in which it has been heavily investing. The company’s deployment of new network architectures and technologies enhances its network quality and connectivity and provides a competitive advantage. Further, by focusing on monetizing its networks, platforms, and solutions, Verizon is effectively growing its customer base while improving its financial performance.
The company's wireless business remains a key driver of its growth. Verizon has consistently added broadband customers, with Q2 marking the eighth straight quarter of more than 375,000 broadband net additions. This signals Verizon’s continued strength in the broadband market, which should contribute to future earnings.
Management's strategy of reinvesting in its business, supporting its dividend, and managing its debt continues to position the company well for future growth. Further, Verizon is taking steps to accelerate its growth and expand its offerings. The company recently announced a $20 billion all-cash acquisition of Frontier, the largest fiber internet provider in the U.S. This acquisition will significantly broaden Verizon’s fiber network, enabling the company to offer advanced broadband services. It also opens up new opportunities for Verizon in digital innovations, including artificial intelligence (AI) and the Internet of Things (IoT).
Analysts currently rate Verizon stock a “Moderate Buy.”
Overall, the combination of a steady dividend, high yield, the company's leadership in wireless technology, and its strategic acquisitions makes Verizon an appealing long-term investment.
#2. TC Energy Stock
TC Energy (TRP) is known for its solid dividend growth history. This North American energy infrastructure company has raised its dividends at a CAGR of 7% in the last 24 consecutive years. This steady growth reflects TC Energy's solid asset base (including regulated and contracted assets) and its ability to capitalize on continued demand for energy infrastructure services.
The company’s management focuses on maximizing the value and performance of its assets. In this regard, TC Energy announced the spinoff of its liquids Pipelines business, which will operate under the name South Bow. This initiative will divide TC Energy into two industry-leading entities, separating its Natural Gas Pipelines and Power and Energy Solutions businesses from its Liquids Pipelines segment. The move will help maximize the value of its assets and boost shareholder value.
TC Energy plans to concentrate its Power and Energy Solutions portfolio on nuclear generation and pumped hydro opportunities. It will also invest in emerging sectors such as carbon capture, utilization, and storage. These strategic investments will likely bolster TC Energy's competitive position and support future growth.
The company plans to place approximately $6-7 billion of assets into service each year, expanding its revenue base. Moreover, it continues to reduce debt through its asset divestiture program. It is also streamlining its business and focusing on efficiencies to boost earnings and support higher payouts.
Post-spinoff, TC Energy will continue building a regulated, low-risk portfolio to drive sustainable dividend growth. It will focus on utility-like assets with a strategy and portfolio mix to drive future earnings.
Thanks to the strength of its business model and a growing earnings base, TC Energy expects to continue to grow the dividend by 3-5% annually.
TRP stock has a “Moderate Buy” consensus rating, and offers a high yield of 6.2%.
