Most dividend investors are familiar with the term Dividend Aristocrat. These companies have steadily increased their payouts every year for a quarter-century.
However, income-focused investors might be less familiar with the term Dividend Achievers. These are stocks with a decade or more of steady dividend growth. With more than 300 companies on this list, it’s easy to overlook some high-quality dividend growth stocks. Three that might have flown under the radar of dividend investors are Brookfield Renewable (NYSE: BEP)(NYSE: BEPC), Brookfield Infrastructure (NYSE: BIP)(NYSE: BIPC), and SL Green Realty (NYSE: SLG).
A renewable energy-powered dividend
Brookfield Renewable recently increased its dividend by 5% for 2022. That brought its dividend growth streak up to 11 consecutive years. It also pushed the company’s dividend yield up to 3.8%, well above the S&P 500‘s average of 1.3%.
The renewable energy giant operates a globally diversified portfolio of hydro, wind, solar, and energy transition assets. They generate renewable power that Brookfield sells under long-term contracts to utilities and other large electricity users. Those contracts produce steady cash flow, the bulk of which Brookfield pays out via dividends (78% in 2021). It also has one of the strongest balance sheets in the renewable energy sector.
Brookfield Renewable expects to grow its cash flow per share at a more than 10% annual rate through 2026, powered by rising power prices, its growing scale, its extensive development pipeline, and M&A. It has ample funding sources to finance its growth. Brookfield therefore believes it can continue growing its dividend at a 5% to 9% annual rate in the coming years.
Up to a baker’s dozen
Brookfield Renewable’s sibling, Brookfield Infrastructure, recently increased its payout by 6% for 2022. That marked the 13th straight year of dividend increases for the global infrastructure operator. At the current stock price, it offers a dividend yield of around 3.2%.
Several factors have helped drive its dividend growth over the years. It all starts with Brookfield’s solid foundation. The company owns a globally diversified portfolio of infrastructure businesses across the utility, energy midstream, transportation, and data sectors. These businesses generate stable cash flow backed by long-term contracts and government-regulated rates. Meanwhile, it has a reasonable dividend payout ratio of 60% to 70% of its annual cash flow. It compliments all that with an investment-grade balance sheet. These factors have enabled Brookfield to sustain its dividend while growing its business.
Brookfield has several growth drivers, including inflation-linked rate increases, growing volumes as the economy expands, expansion projects, and acquisitions. The should support 5% to 9% annual dividend growth in the coming years.
Video: Dividends are an important hedge against inflation, says ProShares Advisors Hyman (CNBC)
A skyscraping dividend
SL Green recently increased its dividend for the 11th straight year. The real estate investment trust (REIT) pays a monthly dividend that yields above 5%.
As Manhattan’s largest office landlord, SL Green owns a portfolio of high-quality office buildings secured by long-term leases with top-notch tenants. These contracts provide the company with steady cash flow to support its dividend.
While the Manhattan office market has been under some pressure due to the pandemic in recent years, it has started to get back on its feet over the past few months. Companies are signing leases for more space as they gear up to bring their employees back into the office.
SL Green has been able to continue growing its dividend over the years thanks to its resilient portfolio, strong financial profile, and development success. Its latest development project, One Vanderbilt, now has leases covering 95.2% of its available space.
With the Manhattan office market recovering, and more development projects in the pipeline, SL Green should be able to continue growing its dividend in the coming years.
The best of both worlds for dividend investors
Since Brookfield Renewable, Brookfield Infrastructure, and SL Green aren’t the best-known dividend stocks, investors are missing out on their steadily rising payouts. Add in their above-average dividend yields, and they’re excellent options for investors seeking to generate steadily rising passive income streams.
See the 10 stocks
*Stock Advisor returns as of January 20, 2022
Matthew DiLallo owns Brookfield Infrastructure Corporation, Brookfield Infrastructure Partners, Brookfield Renewable Corporation Inc., Brookfield Renewable Partners L.P., and SL Green Realty. The Motley Fool owns and recommends Brookfield Renewable Corporation Inc. The Motley Fool recommends Brookfield Infra Partners LP Units, Brookfield Infrastructure Corporation, and Brookfield Infrastructure Partners. The Motley Fool has a disclosure policy.
