The stock market is a dynamic place to invest, and selecting the correct equities to add to a portfolio may be likened to unearthing treasures within an enormous mine. When pursuing financial expansion, dividend stocks stand out as stability and income production pillars. Seven stocks stand out as true stars since they promise significant gains in addition to dividends.
Every one of these businesses, from the seventh one’s lengthy history of providing dividend payments to the first one’s gradual rise in the cannabis real estate market, has distinct advantages and calculated moves that make them attractive investments for dividend seekers.
Read more to learn the backstories of these companies leading in banking, energy, real estate, and consumer staples. These stocks stand out in the competitive market due to their endurance, growth potential, dedication to shareholder value, and outstanding dividend yields.
Explore these seven superstar stocks’ fundamental strengths and appeal from a financial perspective. Each one has the potential to significantly boost your dividend returns and take your investing career to new heights.
Newlake Capital Partners (NLCP)
Newlake Capital Partners (OTCMKTS:NLCP) has a 9.2% forward dividend yield and a track record of growing dividends. The corporation’s dividend policy exhibits a steady ascent, with payouts growing over time.
To begin with, Newlake Capital Partners announced a $0.40 dividend per share of common stock for Q4 2023, a 2.6% increase year-over-year (YoY). Additionally, the business announced dividends of $1.57 per share of common stock for 2023, a noteworthy rise of 9.0% YoY. Newlake Capital Partners’ Q4 payout ratio was 78%.
Fundamentally, these dividend figures reflect Newlake Capital Partners’ robust profitability. This can also be observed in an uplift in funds from operations (FFO) and substantial net income attributable to common stockholders. The corporation recorded $7.0 million in net income for Q4, a significant increase YoY.
Lastly, Newlake Capital Partners’ impressive net income of $24.6 million for 2023 demonstrated its steady prosperity over time. Overall, Newlake’s consistent profitability supports its rapid valuation growth potential in the dynamic cannabis real estate market.
Golub Capital (GBDC)
With a solid yield of 9.9%, Golub Capital (NASDAQ:GBDC) may provide significant adjusted net investment income (NII) and EPS for its investment portfolio.
With an adjusted NII per share of $0.50, the remarkable adjusted NII return on equity (ROE) is 13.3%. This demonstrates Golub Capital’s profitability and capacity to create value, showing that it generates sizable income compared to its equity base. Similar to the adjusted ROE of 11.8%, the adjusted EPS of $0.45 highlights the company’s robust performance and potential for earnings growth.
Furthermore, one-stop loans make up around 86% of Golub Capital’s portfolio, highlighting the credit portfolio’s general soundness and durability. This large percentage of profitable investments results from Golub Capital’s careful approach to risk management and asset selection. This lessens the impact of probable defaults and credit events.
Finally, decreasing incentive payments from twenty percent to fifteen percent improves shareholder alignment by saving money and raising investor potential returns.
Innovative Industrial Properties (IIPR)
In 2023, Innovative Industrial Properties (NYSE:IIPR) paid a $7.22 dividend per share, following constant increases for six years, and the company’s forward dividend yield stands at 7.5%. The Board’s planned dividend payout range of 75% to 85% of adjusted funds from operations (AFFO) was met by the company’s most recent quarterly dividend of $1.82 per share in Q4 2023.
Furthermore, a dividend payout ratio within the intended range suggests sustained growth potential and careful money management. Innovative Industrial Properties has a flexible and cautious balance sheet with a debt-to-total gross assets ratio of 12% and no variable-rate debt. The company’s overall liquidity at the end of Q4 2023 was over $175 million. This includes cash and short-term investments as well as availability under its revolving credit facility.
Moreover, Innovative Industrial Properties pledged up to $119.5 million in 2023 for upgrades to infrastructure, new leases, lease revisions, and property purchases. Overall, the company has a proactive attitude towards growing its property portfolio. Therefore, this facilitates the expansion of its tenant partners, as evidenced by its substantial capital commitments and investment activities.
Enterprise Products Partners (EPD)
Enterprise Products Partners (NYSE:EPD) declared that 2023 distributions climbed by 5.3% over 2022. This represents the 27th year in a row that distributions have grown. Enterprise Products Partners is dedicated to providing value to its unit-holders. This dedication is based on coordinating dividends with its financial lead, as demonstrated by this steady distribution growth.
To support a 7.2% forward dividend yield, the company generated continuous cash flow from its core activities in 2023 and 2022, as seen by Adjusted Cash Flow from Activities (CFFO), which was steady at $8.1 billion. This measure sheds light on the stable profitability and operational edge.
Additionally, adjusted free cash flow (FCF) grew from $3.0 billion in 2022 to $4.8 billion in 2023, demonstrating enhanced possibilities for debt reduction, reinvestment, and better cash flow generation efficiency.
Overall, adjusted FCF increased due to the Enterprise’s capacity to maximize capital expenditures. Hence, the increase creates extra cash flow that may be used for projects that increase value or are distributed and repurchased by shareholders.
Universal Health (UHT)
The range of products and services offered by Universal Health (NYSE:UHT) in twenty-one states reduces geographic risk while improving income stability.
Universal Health ensures its revenue streams are not overly dependent on any market by investing in healthcare and human services-related facilities across many locations. Thus, due to its diversity, the business is protected against regionally focused legislative changes or localized economic downturns.
Notably, Universal Health’s forward dividend yield of 8.2% highlights a solid source of revenue for income investors. The consistent dividend of $0.725 per share announced for Q4 2023 proves that Universal Health can produce enough cash flows from its healthcare property portfolio.
Furthermore, Universal Health’s concentration on purchasing revenue-generating healthcare facilities is demonstrated by its smart acquisition of the McAllen Doctor’s Center. The triple-net master lease on the fully leased medical office building guarantees Universal Health a consistent revenue stream over the lease’s length.
Overall, the long-term leasing arrangement with possibilities for renewal also offers stability and cash flow insight into the future.
Universal (UVV)
With a forward dividend yield of 6.3%, Universal’s (NYSE:UVV) valuation potential is supported by top-line growth. Universal’s consolidated revenues increased significantly compared to the nine months of fiscal 2023. They rose from $101.9 million to $2.0 billion for the nine months of fiscal 2024. Comparing Q3 2023 to Q3 2024, revenues climbed by $26.5 million to $821.5 million.
Fundamentally, higher tobacco sales prices, which more than offset reduced tobacco sales volumes, and a better product mix in the Tobacco Operations division are responsible for this significant revenue rise. The capacity to generate revenue growth despite challenging market conditions highlights Universal’s dominant market position and successful pricing tactics.
Furthermore, Universal’s solid financial stability and profitability can be reflected in solid growth in net income. When comparing Q3 2023 to Q3 2024, Universal’s net income increased by 28% YoY. Therefore, this significant increase highlights how well the company’s strategic strategies drive up valuation and improve bottom-line performance.
Altria (MO)
In 2023, Altria (NYSE:MO) distributed $6.8 billion in dividends, indicating its dedication to repaying shareholders. This continuous dividend payment reflects the company’s robust cash flow creation and dedication to regularly providing dividend distributions. In addition to increasing shareholder returns, the 4.3% dividend increase in August 2023 also shows management’s optimism.
With a forward dividend yield of 9%, the company has a history (55 years) of dividend hikes and payments. This strengthens its standing as a dependable income investment and raises its allure for investors who prioritize dividends.
Furthermore, Altria bought back 22.7 million shares at an average price of $43.96 as part of a $1 billion share repurchase program. This buyback of shares shows the company’s faith in giving funds back to shareholders. Altria increases the ownership stake of current shareholders and may increase EPS by repurchasing shares, which lowers the outstanding shares.
Finally, a new $1 billion share repurchase program was approved, demonstrating insiders’ faith in the company’s potential for long-term growth and dedication to generating value.
As of this writing, Yiannis Zourmpanos held a long position in IIPR. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.