The Motley Fool

3 Amazingly Reliable Dividend Growers to Buy Now

Howdy, Fools. I’m back again to highlight three attractive dividend-growth stocks. As a quick reminder, I do this because companies that consistently increase their dividends

  • can provide a growing stream of income, no matter what the market is doing;
  • tend to have rock-solid fundamentals; and
  • usually outperform the market over a long period of time.

Dividend yield is important. But the consistency at which the payout grows is equally as important — if not more.

So, without further ado, let’s get to this week’s list of dividend growers.

Presence of royalty

Leading things off is Franco-Nevada (TSX:FNV)(NYSE:FNV), which has raised its dividend for an impressive 11 consecutive years. Year to date, shares of the gold royalty company are down 15% versus a loss of 12% for the S&P/TSX Capped Materials Index.

Don’t expect Franco-Nevada’s recent weakness to last long. Over the past 10 years, the company has outperformed gold stocks as well as gold itself by a very wide margin. Thanks to consistent dividends — driven by low overhead and heavy free cash flow — the stock has done well in both bull and bear markets.

Franco-Nevada’s 2017 dividends of $168 million were the highest in gold industry. Couple that shareholder friendliness with a debtless balance sheet, and you have a rather attractive risk/reward tradeoff.

Equitable treatment

Next up, we have Equitable Group (TSX:EQB), whose dividend has increased for a solid eight straight years. Over the past year, shares of the financial services specialist are up 2% versus a loss of 6% for the S&P/TSX Capped Financial Index.

For conservative investors who love the financial services space, but who also have plenty of Big Five bank exposure, consider Equitable. It operates a branchless business model and competes in underserved “niche” lending and savings markets. This approach allows Equitable to consistently produce a return on equity (ROE) in the mid to high teens, while maintaining solid capital levels.

Currently, the stock sports a decent dividend yield of 1.7% along with a very cheapish forward P/E of 5.8.

Pipeline to profits

Rounding out our list this week is Pembina Pipeline (TSX:PPL)(NYSE:PBA), which currently boasts seven years of consecutive dividend increases. Shares of the energy pipeline operator are down just 1% over the past six months, while the S&P/TSX Capped Energy Index has fallen 17% during the same time frame.

With over 18,000 kilometres of pipelines — total capacity of roughly three million barrels of oil equivalent per day — Pembina utilizes massive scale to generate consistent (and growing) cash flow. Trailing 12-month free cash flow has rocketed 300% over the past five years, currently sitting at a robust $921 million.

Since it began paying dividends in 1997, Pembina has paid approximately $6.5 billion in dividends. At a current yield of 5.3%, the stock looks especially juicy.

The Foolish bottom line

There you have, Fools: three amazingly consistent dividend-growth stocks to help you outperform in all market conditions.

As always, don’t think of them as formal recommendations. They’re simply ideas for further investigation. A dividend cut can be particularly devastating on a company’s stock price, so thorough research is still required.

Fool on.

Just Released! 5 Stocks Under $49 (FREE REPORT)

Motley Fool Canada's market-beating team has just released a brand-new FREE report revealing 5 "dirt cheap" stocks that you can buy today for under $49 a share.
Our team thinks these 5 stocks are critically undervalued, but more importantly, could potentially make Canadian investors who act quickly a fortune.
Don't miss out! Simply click the link below to grab your free copy and discover all 5 of these stocks now.

Claim your FREE 5-stock report now!

Brian Pacampara owns no position in any of the companies mentioned. Pembina is a recommendation of Dividend Investor Canada.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss an important event.

Iain Butler and the Stock Advisor Canada team only publish their new “buy alerts” twice a month, and only to an exclusively small group.

This is your chance to get in early on what could prove to be very special investment advice.

Enter your email address below to get started now, and join the other thousands of Canadians who have already signed up for their chance to get the market-beating advice from Stock Advisor Canada.

I consent to receiving information from The Motley Fool via email, direct mail, and occasional special offer phone calls. I understand I can unsubscribe from these updates at any time. Please read the Privacy Statement and Terms of Service for more information.