Dividends form a reliable base for value investors seeking passive income. And dividend stocks increasing payouts are even better. For some investors, their entire motive to invest in stocks is to have a regular source of income. Hence, it is very important to understand the dividend history of a company, especially during economic downturns.
Generally, announcements of dividend increases sends a positive signal to the market. And conversely, if a company decides to decrease or lapse its dividend payment, it is taken very negatively.
Further, in order to maintain the purchasing power of that dividend money, it become vital for a company to grow its dividend payments. Given that inflation is currently at all-time highs, I have selected seven stocks that have a track record of paying monthly dividends.
These companies are known for consistently raising their dividend payments. They have established business and have been generating growth over many years. So let’s look at which of these dividend stocks increasing payouts to look at in the month of July 2022.
|O||Realty Income Corporation||$68.05|
|PBT||Permian Basin Royalty Trust||$15.10|
|PVL||Permianville Royalty Trust||$3.41|
|CRT||Cross Timbers Royalty Trust||$15.62|
|ITUB||Itaú Unibanco Holding S.A.||$4.10|
|MAIN||Main Street Capital Corporation||$40.78|
|SBR||Sabine Royalty Trust||$61.27|
Realty Income Corporation (O)
Realty Income Corporation (NYSE:O) is one of the most reliable monthly-dividend-paying companies in the United States. The company has been paying dividends over the last 53 years and is among the group of dividend aristocrats of the S&P 500. It has increased its dividends consecutively for 25 years.
The company derives its income from the monthly rental payments of over 11,000 commercial properties owned under long-term lease agreements. The company’s clients operate in 70 different industries across the United States.
Most of the tenants are providers of essential needs and operators of drugstores, convenience department stores or dollar stores. Even in bad times, their customers should keep coming, so the company’s income tends to be stable. Generally, lease agreements are for a period of seven to 10 years, which makes cash flow predictable.
On June 15, 2022, the Board of Directors announced that it would increase the company’s monthly cash dividend to 24.75 cents per share from 24.7 cents per share. The dividend will be payable on July 15, 2022, to stockholders of record as of July 1, 2022. This is the 116th dividend increase since Realty Income’s listing on the NYSE in 1994.
Permian Basin Royalty Trust (PBT)
Permian Basin Royalty Trust (NYSE:PBT), holds overriding royalty interests in various oil and gas properties in the United States, including 75% net overriding royalty interest in the Waddell Ranch properties and 95% interest in Texas Royalty properties.
The board declared a cash distribution of about 9.17 cents per unit, up 166.6% from the 3.44 cents paid last month. The higher dividend is led by increased oil prices. Also, earlier, only the Texas Royalty Properties were contributing to the monthly distribution.
The dividend is payable on July 15, 2022, to unit holders of record on June 30, 2022.
Recently, several Wall Street analysts have raised their rating on the stock. On May 20, 2022, TheStreet upgraded Permian Basin Royalty Trust to “B” from a rating of “C.”
The company’s four-year average dividend yield of 7.6% is higher than the sector median of 5.6%.
Permianville Royalty Trust (PVL)
Incorporated in 2011, Permianville Royalty Trust (NYSE:PVL) is engaged as a statutory trust. The company derives its income from its right to receive 80% net profit interest from oil and natural gas sales from its properties in Texas, Louisiana and New Mexico.
Most recently, PVL announced a 40.6% increase in its monthly dividend to 4.5 cents per share from 3.2 cents per share reported last month. Dividends are payable on July 15, 2022, to the shareholders of record as of June 30, 2022.
At current levels, PVL maintains a four-year average dividend yield of 15%, much higher than the industry average of 5.6%.
Cross Timbers Royalty Trust (CRT)
Cross Timbers Royalty Trust (NYSE:CRT) operates as an express trust company in the United States. The company generates revenues from royalties from holding 90% of net profit interests in properties in Texas, Oklahoma, and New Mexico, plus a 75% working interest in four locations in Texas and three in Oklahoma.
The company has an uninterrupted history of paying dividends over the last 30 years.
On June 17, 2022, the company declared a monthly cash dividend of 27.2187 cents per share, up 66% from the previous dividend of 16.4 cents, led by higher gas volume sales in Mexico’s non-operating unit.
Given CRT’s strong cash flow and five-year dividend growth rate of over 8%, it should be able to sustain its dividend payments.
Itau Unibanco Holding S.A. (ITUB)
Itau Unibanco Holding S.A. (NYSE:ITUB) is a regional bank in Brazil. The company has been paying monthly dividends to its shareholders consistently over the last 15 years. ITUB has increased its monthly dividends by 25.8% over the trailing-12-month period.
The company has been consistently delivering superior quarterly results, which should support its dividend payments going forward. In the last year, its top line was constantly higher than the consensus estimates. Earnings were also better than estimates in three out of the four quarters.
Revenues increased 11.5% year on year to R $33 billion in Q1 2022, led by a 280 basis point increase in credit sales through its digital channels. Overall, the company won 5.7 million customers during the quarter. Improving financial results should sustain its dividend growth going forward.
Main Street Capital Corporation (MAIN)
Main Street Capital (NYSE:MAIN) is a business development company, providing services to small- to mid-sized companies, mostly those with revenues between $5 million and $300 million. The company mostly finances small businesses who may find it difficult to access capital through traditional banking routes. In exchange, MAIN charges a higher rate of interest on these loans or a percentage ownership stake in the business.
The company is required to distribute 90% of its taxable income to the shareholders in the form of dividends in order to avoid taxes and maintain its status as a business development company.
The board has maintained a monthly cash dividend of 21.5 cents per share. In the event of higher cash flow, it offers a supplemental dividend. In June 2022, management announced MAIN would pay a supplemental dividend of 7.5 cents per share. A consistent payment helps the company to evade market speculation.
Sabine Royalty Trust (SBR)
Sabine Royalty Trust (NYSE:SBR) derives income from its interest in various oil and gas properties across the U.S. It has locations in Florida, Louisiana, Mississippi, New Mexico, Oklahoma and Texas.
Rising oil and gas prices have augured well for the company. In Q1 2022, total revenues more than doubled to $23.9 million, up from $9.7 million reported in the year-earlier period.
Operating margins have expanded 345 basis points (bps) to 96.2% versus 92.8% recorded in the year-earlier period. With energy prices expected to remain at an elevated level, I expect SBR to continue delivering superior results.
The trust offers a solid dividend, with the latest being nearly 55 cents. Over the last five years, dividends have increased at a rate of 20.34%, much higher than the sector average. The four-year average dividend yield of 7.8% is higher than the sector average of 5.6%.
On the date of publication, Sakshi Agarwalla did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.