Top Dividend Stocks to Buy Now: Brookfield, PepsiCo, and VICI

Why Dividend Stocks are a Smart Investment

Buying dividend stocks is an excellent investment choice, especially when focusing on companies that consistently increase their dividends. Historically, dividend stocks have outperformed non-dividend-paying stocks by more than two-to-one over the long term. These three companies have excellent records of increasing their dividend payments.

Brookfield Infrastructure: A Global Infrastructure Powerhouse

Brookfield Infrastructure has increased its dividend for 16 consecutive years, growing its payout at a 9% compound annual rate. Brookfield's current dividend yields 4.2%, well above the S&P 500's 1.2% yield. The dividend payouts are backed by very stable cash flow, with approximately 85% of funds from operations (FFO) derived from long-term contracts or government-regulated rate structures, the majority of which index rates to inflation. The company pays out 60% to 70% of its stable cash flow in dividends, retaining the remainder to invest in expansion projects. Brookfield anticipates that a combination of inflation-driven rate increases, volume growth as the global economy expands, and expansion projects will boost its FFO per share by 6% to 9% annually. Additionally, it expects acquisitions to drive FFO per share growth exceeding 10% annually. Altogether, these drivers should support dividend increases of 5% to 9% per year.

PepsiCo: Quenching Investors' Thirst for Dividends for Decades

PepsiCo has increased its dividend for 53 straight years, qualifying it for the elite group of Dividend Kings, companies with 50 or more consecutive years of annual dividend increases. The global beverage and snacking giant has grown its dividend at a healthy 7.5% compound annual rate over the past 15 years. PepsiCo's dividend currently yields 4%. The company's long-term target is to deliver organic revenue growth of 4% to 6% per year, along with core earnings-per-share growth in the high single digits. PepsiCo invests heavily to support its continued growth by investing in product innovation, manufacturing capacity expansions, digitalization, and logistics. To meet evolving consumer demands, PepsiCo is transitioning its portfolio to offer healthier drink and snack options. Acquisitions have accelerated these efforts. Most recently, it closed the purchase of fast-growing prebiotic soda brand Poppi, following earlier deals for Siete and Sabra. These strategic acquisitions should aid PepsiCo in delivering continued dividend increases.

VICI Properties: A Low-Risk Wager on a Growing Dividend

VICI Properties recently delivered its eighth consecutive annual dividend increase (every year since its formation). The real estate investment trust (REIT) has grown its payout at a 6.6% compound annual rate during that period, significantly outpacing the 2.3% average growth rate of its peers. VICI's dividend currently yields 5.7%. The REIT owns a large portfolio of experiential properties secured by very long-term triple net leases (NNN). That lease structure produces very stable rental income because tenants cover all property operating costs, including routine maintenance, real estate taxes, and building insurance. An increasing percentage of its leases escalate rents at rates linked to inflation (42% this year, rising to 90% by 2035). As a result, it should produce very stable and steadily rising rental income. Paying out a conservative percentage of stable cash flow in dividends (about 75%) enables VICI to retain cash to invest in additional income-generating experiential real estate. It recently agreed to provide up to $510 million in funding for the development of the Mono Casino and Resort in California. The company also invested $450 million into a mezzanine loan supporting the development of One Beverly Hills, a landmark luxury mixed-use project in California. VICI's rising rents and growth portfolio should enable the REIT to continue increasing its high-yielding dividend.