Dividend Kings have demonstrated their dependability over many years. This exclusive category consists of companies that have raised their dividend payouts for a minimum of 50 consecutive years. The list is highly selective, with just 56 companies currently meeting the Dividend King criteria.
Three stocks are showing strong potential to join the ranks of Dividend Kings: Chevron ( CVX 0.46%), Enbridge ( ENB 1.05%), and Realty Income ( O 0.84%). With continued dividend increases expected, these high-yield stocks are attractive options for investors aiming to build a consistently growing stream of passive income.
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A high-octane dividend stock
Earlier this year, Chevron extended its record of annual dividend hikes to 38 years in a row—making it the oil industry’s second-longest streak. This is particularly notable given the sector’s frequent ups and downs.
Chevron’s robust portfolio, among the most resilient in the industry, supports its dividend yield of over 4%. With a breakeven oil price near $30 per barrel, Chevron is able to produce strong cash flow even when the market is weak. This stability allows the company to both expand its operations and reliably return capital to shareholders.
The company also boasts one of the healthiest balance sheets among its peers. Its leverage ratio is below 15%, which is not only under its target range of 20%-25% but also at the lower end compared to similar companies.
Chevron’s long-term prospects have brightened after its recent acquisition of Hess, which has expanded its resource base and extended its growth outlook for production and free cash flow into the next decade. The company is also putting capital into lower-carbon ventures such as lithium extraction, carbon capture and storage, and hydrogen, aiming to diversify and secure its future earnings. These efforts, combined with prudent financial management, put Chevron in a strong position to maintain and potentially grow its dividend for years ahead.
A model of stability
Enbridge has a track record of paying dividends for more than 70 years, with 30 consecutive years of increases. The Canadian pipeline and utility giant generates 98% of its income from stable, predictable cost-of-service arrangements and long-term contracts, which helps shield it from swings in commodity prices and volumes.
This energy infrastructure leader distributes 60% to 70% of its reliable cash flow as dividends, currently yielding 5.5%. The remainder is reinvested in organic growth and strategic acquisitions. Enbridge’s strong investment-grade credit rating also gives it the flexibility to pursue new growth initiatives.
Enbridge anticipates ongoing growth, supported by its multi-billion-dollar pipeline of capital projects, which includes expanding its oil and gas transportation networks, utility projects, and new renewable energy developments. The company is also exploring opportunities in carbon capture and blue ammonia. Enbridge projects about 5% annual earnings growth over the long run, which should allow for similar annual dividend increases.
As dependable as it gets
Realty Income has established itself as a highly dependable income investment. Since going public in 1994, this real estate investment trust (REIT) has raised its monthly dividend 132 times, including annual increases for over 30 years as a listed company.
With a diversified portfolio spanning retail, industrial, gaming, and other sectors, Realty Income generates steady cash flow. Its properties are leased under long-term net leases, which require tenants to pay all property-related expenses. The company pays out roughly 75% of its consistent cash flow as dividends, reinvesting the rest into more income-producing real estate. Realty Income also maintains one of the strongest balance sheets in the REIT industry, providing it with significant financial flexibility for future growth.
Realty Income estimates that $14 trillion worth of real estate in its core markets is suitable for the net lease model. This gives the REIT a substantial opportunity to keep expanding its portfolio and increasing its dividend payouts over time.
Steadily moving toward the throne room
Chevron, Enbridge, and Realty Income are all strong candidates to become future Dividend Kings. Each has already demonstrated a long history of dividend growth. Their solid financial foundations and clear earnings growth prospects make them wise picks for investors seeking reliable and growing passive income. These leading income stocks could help strengthen your financial future.
