Investing in dividend stocks, especially those with a track record of consistently increasing dividends, is almost always a wise long-term strategy. Historical data shows that, over the long run, dividend-paying stocks as a whole tend to outperform non-dividend-paying stocks. Among the many options, Brookfield Infrastructure (BIP), PepsiCo (PEP), and VICI Properties (VICI) all possess exceptional historical records in terms of dividend growth.
Brookfield Infrastructure has increased its dividend for 16 consecutive years since its inception, achieving a compound annual dividend growth rate as high as 9%. Its current dividend yield is approximately 4.2%, significantly higher than the average of the S&P 500 index. This dividend is supported by extremely stable cash flows, with about 85% of its Funds From Operations (FFO) derived from businesses protected by long-term contracts or government-regulated rate structures, with most rates linked to inflation. The company allocates 60% to 70% of its stable cash flow to dividends, investing the remainder into new expansion projects.
Looking ahead, the company has ample growth drivers. Inflation-driven rate increases, volume growth fueled by global economic expansion, and existing expansion projects are expected to collectively drive 6% to 9% annual growth in its FFO per share. Furthermore, an active acquisition strategy – such as the three deals completed this year totaling $1.3 billion – will further fuel growth. These factors together provide a solid foundation for the annual dividend growth target of 5% to 9%. The company’s operations span utilities, transportation, midstream data, and critical infrastructure sectors. These assets are protected by high barriers to entry and consistently generate reliable cash flow.
PepsiCo is a veritable Dividend King, having increased its dividend for 53 consecutive years. This record itself demonstrates its exceptional operational resilience and commitment to shareholder returns. Over the past 15 years, its dividend has maintained a healthy compound annual growth rate of approximately 7.5%, with a current dividend yield of about 4%.
The company’s long-term goal is to achieve 4% to 6% annual organic revenue growth, while maintaining high-single-digit growth in core earnings per share. To achieve this, PepsiCo continues to invest in product innovation, capacity expansion, and upgrades to its digital and logistics systems. Simultaneously, in response to shifting consumer preferences, the company is actively transforming its product portfolio, striving to offer healthier beverage and snack options. Strategic acquisitions, such as the recent acquisition of the prebiotic soda brand Poppi, are accelerating this process, ensuring the continuation of its dividend growth.
As a Real Estate Investment Trust (REIT), VICI Properties has increased its dividend for eight consecutive years since its founding, achieving a compound annual dividend growth rate of 6.6%, significantly higher than the industry average. Its current dividend yield is quite attractive, at approximately 5.7%.
VICI’s core strength lies in its vast portfolio of experiential real estate. Under its triple-net lease structure, tenants bear all property operating expenses, providing VICI with highly stable and predictable rental income. More notably, an increasing proportion of its lease terms include rent escalations linked to inflation, meaning future rental income will steadily rise. The company distributes about 75% of its cash flow as dividends. This conservative payout ratio allows the company to retain sufficient funds for reinvestment.
