In this dividend contenders list, we will take a look at dividend growth companies.
Dividend stocks have long been favored by investors for the income they generate, and they become even more appealing when dividends increase over time. Investors frequently seek out companies with a strong history of raising their dividends, as this growth boosts their income over the long term. Sustaining long-term dividend growth is challenging. For instance, “dividend aristocrats” are companies that have grown their dividends consistently for at least 25 years, and only about 68 US companies have been successful in achieving this. This demonstrates how difficult it is to attain such a high standard. However, many companies still manage to build shorter dividend growth histories, showcasing their resilience and potential to reach even greater milestones over time. Dividend contenders are well-regarded for having raised their dividends for 10 straight years, though they have yet to reach the 25-year mark needed to be considered long-term dividend growers.
Investors are drawn to dividend growth stocks, as these stocks have shown strong performance over the years. Data from Ned Davis Research covering the past 50 years revealed that high-quality companies that initiate and increase dividends have delivered higher returns and lower volatility than an equal-weighted index. By holding a portfolio of dividend growth stocks, investors can potentially achieve not only favorable risk-adjusted returns but also a more stable investment experience—one less impacted by the risks of market timing, which can reduce long-term gains. This strategy can help investors build wealth steadily over time, contributing to a more secure financial future.
Recently, tech stocks have surged to the forefront, and investors are capitalizing on this momentum, temporarily overshadowing dividend stocks. However, this shift doesn’t imply a dim outlook for dividend stocks. Over the long term, dividend growth stocks have consistently demonstrated their strength and reliability. According to a report by Nuveen, companies that consistently grow or start paying dividends have delivered higher annualized returns with less volatility compared to other parts of the equity market. Although these dividend growth stocks don’t outperform in every market condition, their solid risk-adjusted returns over extended periods make them a strong foundation for an equity portfolio.
Also read: Dividend Champions List: Top 15
Michael Clarfeld, manager of the Dividend Strategy portfolios at ClearBridge Investments, supports investing in dividend stocks. Clarfeld emphasizes the value of long-term compounding, viewing dividend stocks as essential for a well-rounded portfolio. He advocates for a dividend growth approach, focusing on companies capable of steadily increasing their dividends over time. Instead of chasing high yields for immediate gains, he advises investors to consider total return, which includes the reinvestment of dividends. In an interview with Morningstar, he noted that the average company in his portfolios has compounded dividends at around 9% annually, meaning an investor’s income could potentially double every eight years. Clarfeld further said that dividend investing centers on evaluating a company’s cash flows and how they allocate payouts to investors.
In this dividend contenders list, we will take a look at companies that have raised their payouts for at least 10 consecutive years.
Image by Alexsander-777 from Pixabay
Our Methodology:
This list focuses on dividend contenders—companies known for raising their dividends consistently for 10 years but less than 25. From this group, we selected those with the highest dividend yields as of November 11, ranked from lowest to highest yield.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points. (see more details here).
15. The PNC Financial Services Group, Inc. (NYSE:PNC)
Dividend Yield as of November 11: 3.04%
The PNC Financial Services Group, Inc. (NYSE:PNC) is an American bank holding and financial services company that offers a wide range of services to its consumers. The company reported strong earnings in the third quarter of 2024, achieving positive operating leverage through revenue growth and disciplined expense management, while also expanding its customer base and bolstering capital levels. Notably, net interest income and net interest margin improved, signaling the start of a growth path toward anticipated record NII in 2025. In June, the Federal Reserve released its annual stress test results, showing PNC with a start-to-trough CET1 ratio depletion of just 1.6%, the best performance among its peers.
The PNC Financial Services Group, Inc. (NYSE:PNC) reported revenue of $5.43 billion in Q3 2024, up nearly 4% from the same period last year. The company’s net interest income for the quarter came in at $3.4 billion, growing from $3.3 billion in the previous quarter. It is actively utilizing AI to enhance its operations. Recently, the company has entered into an agreement with Plaid to form direct data access, allowing PNC customers across the country to securely connect and share their financial data with selected financial apps via Plaid. PNC utilizes Akoya as its API provider to transmit customer financial information to data recipients.
In October, The PNC Financial Services Group, Inc. (NYSE:PNC) declared a quarterly dividend of $1.60 per share, having raised it by 3.2% in July. This marked the company’s 14th consecutive year of dividend growth, which makes PNC one of the best stocks on our dividend contenders list. The stock has a dividend yield of 3.08%, as of November 11.
At the end of Q2 2024, 51 hedge funds tracked by Insider Monkey reported having stakes in The PNC Financial Services Group, Inc. (NYSE:PNC), compared with 52 in the previous quarter. These stakes have a total value of $911 million. With 2.2 million shares, Citadel Investment Group was the company’s leading stakeholder in Q2.
14. Fulton Financial Corporation (NASDAQ:FULT)
Dividend Yield as of September 28: 3.20%
Fulton Financial Corporation (NASDAQ:FULT) is an American regional financial services company that offers services in banking, lending, and investment management. The company’s earnings for the third quarter of 2024 remained strong. It generated $317.6 million in revenues, which showed a significant 14.6% growth from the same period last year. The company’s strong performance, consistent business trends, and stable asset quality were further boosted by a significant contribution from the Republic acquisition. Since the start of 2024, the stock has surged by nearly 28.8% and its 12-month returns came in at 57.7%.
Fulton Financial Corporation (NASDAQ:FULT), one of the best stocks on our dividend contenders list, has a strong cash position which has helped it grow its dividends over the years. The company’s operating cash flow for the trailing twelve-month period came in at $231.2 million. In addition, it has nearly $1.6 billion available in cash in the most recent quarter.
On September 17, Fulton Financial Corporation (NASDAQ:FULT) announced a quarterly dividend of $0.17 per share, which was in line with its previous dividend. Overall, the company maintains a 17-year streak of consistent dividend growth. The stock’s dividend yield on November 11 came in at 3.2%.
Insider Monkey’s database of Q2 2024 indicated that 13 hedge funds owned stakes in Fulton Financial Corporation (NASDAQ:FULT), which remained unchanged from the previous quarter. The stakes owned by these hedge funds have a collective value of $190 million in total. Ken Griffin’s Citadel Investment Group was the company’s leading stakeholder in Q2.
13. Northrim BanCorp, Inc. (NYSE:NRIM)
Dividend Yield as of September 28: 3.24%
Northrim BanCorp, Inc. (NYSE:NRIM) is an Alaska-based bank holding company that offers various financial products and services including checking and savings accounts, loans, mortgages, credit cards, investment services, treasury management, and online banking facilities. The company’s strategic emphasis on gaining market share, while upholding a disciplined credit culture, resulted in another strong quarter. Ongoing investments in infrastructure and personnel are attracting new clients who value the distinctive service offered. Looking ahead, the company remains optimistic about further growth in deposits and loans across its expanding presence in Alaska.
Northrim BanCorp, Inc. (NYSE:NRIM) experienced solid deposit-funded loan growth in the third quarter. Both deposits and loans grew by 7% compared to the end of the second quarter. Additionally, its deposit market share rose by 4% over the past year and by 42% over the past five years. Its cash position is solid which makes it a strong dividend payer. The company’s trailing twelve-month operating cash flow came in at $5.79 million.
Northrim BanCorp, Inc. (NYSE:NRIM) currently offers a quarterly dividend of $0.62 per share, having raised it by $1.6% in August this year. Through this increase, the company stretched its dividend growth streak to 14 years, which makes NRIM one of the best dividend stocks on our dividend contenders list. The stock has a dividend yield of 3.24%, as of November 11.
As of Q2 2024, 7 hedge funds in Insider Monkey’s database owned stakes in Northrim BanCorp, Inc. (NYSE:NRIM), which remained unchanged from the previous quarter. These stakes are worth $8.5 million in total.
12. U.S. Bancorp (NYSE:USB)
Dividend Yield as of November 11: 3.91%
U.S. Bancorp (NYSE:USB) is an American bank holding company that provides a wide range of related services of its consumers. The bank formed a strategic partnership aimed at addressing the banking needs of Edward Jones’ clients with top U.S. Bank deposit and credit card solutions. Through this collaboration, Edward Jones financial advisors will gain the resources and options to offer co-branded U.S. Bank deposit and credit card products to their US clients, starting in late 2025.
U.S. Bancorp (NYSE:USB) reported mixed earnings in the third quarter of 2024. The company’s revenue of $6.83 billion fell by 2.4% on a YoY basis. The revenue also missed analysts’ expectations by $72.3 million. That said, it expects continued positive operating leverage growth in the fourth quarter and into 2025. Net interest income and margins have risen compared to the previous quarter, supported by an improved loan mix, ongoing repricing of fixed-rate earning assets, and careful management of liabilities.
In addition, credit quality outcomes aligned with expectations, and U.S. Bancorp (NYSE:USB) strengthened its capital position, closing the quarter with a CET1 capital ratio of 10.5%. They remain focused on balancing capital growth through earnings accretion with capital distributions and anticipate resuming share buybacks in the near future.
U.S. Bancorp (NYSE:USB) declared a 2.2% hike in its quarterly dividend at $0.50 per share on September 12. This was the company’s 14th consecutive year of dividend growth. In the past five years, it has grown its dividends at an annual average rate of 5.19%. With a dividend yield of 3.9%, USB is one of the best stocks on our dividend contenders list.
11. Bristol-Myers Squibb Company (NYSE:BMY)
Dividend Yield as of November 11: 3.97%
Bristol-Myers Squibb Company (NYSE:BMY) is a New York-based multinational pharmaceutical company. It has traditionally concentrated on treatments for hematology, oncology, immunology, and cardiovascular conditions. In the third quarter, the company made significant progress, highlighted by the landmark US approval of Cobenfy for schizophrenia, ongoing sales growth, robust cash flow generation, and key advancements in its pipeline. The stock has surged by over 14.5% since the start of 2024.
Bristol-Myers Squibb Company (NYSE:BMY) generated $11.9 billion in revenues in the third quarter of 2024, which showed an 8.5% growth from the same period last year. The strong performance in the quarter was fueled by sales growth across its expanded oncology portfolio and effective operational execution. Overall, the results showcased the company’s capability to overcome competitive challenges while driving substantial revenue growth. At the end of the quarter, it had roughly $8 billion available in cash and cash equivalents.
Bristol-Myers Squibb Company (NYSE:BMY) is focused on finishing the year with strong execution, advancing its Growth Portfolio, prioritizing high-growth opportunities, and continuing to achieve transformational results for patients. Worldwide revenues for the Growth Portfolio rose to $5.8 billion in the most recent quarter, up from $4.9 billion in the same period last year, reflecting an 18% increase on a reported basis or 20% when adjusted for foreign exchange effects.
Bristol-Myers Squibb Company (NYSE:BMY), one of the best stocks on our dividend contenders list, currently offers a quarterly dividend of $0.60 per share. The company has been growing its dividends for 18 consecutive years. The stock’s dividend yield on November 11 came in at 3.9%.
10. Philip Morris International Inc. (NYSE:PM)
Dividend Yield as of November 11: 4.29%
Philip Morris International Inc. (NYSE:PM) is an American multinational tobacco company that also offers a wide range of related products. In October, the stock hit its all-time high at nearly $133 per share as the company’s smoke-free segment continues to generate substantial momentum. The stock has delivered a nearly 32% return since the start of 2024. In the third quarter of 2024, the company’s smoke-free product (SFP) shipments, now available in 92 markets, approached 40 billion units. This segment contributed 38% to its total net revenue and made up 40% of gross profit, marking an increase of 1.9 and 2.2 percentage points, respectively, compared to the same quarter last year.
Zyn remains the largest contributor to Philip Morris International Inc. (NYSE:PM)’s growth, with volumes increasing by 43.6% year-over-year, reaching 164.6 million cans for the quarter. Zyn is a nicotine pouch containing nicotine powder and flavoring rather than tobacco. The company acquired the brand at the end of 2022 through its purchase of Swedish Match, a transformative acquisition for the company.
Philip Morris International Inc. (NYSE:PM) generated $9.9 billion in revenues in the most recent quarter, up 8.4% from the same period last year. The revenue exceeded analysts’ expectations by $220 million. The company’s operating income for the quarter came in at $3.7 billion, which saw an 8.4% growth on a YoY basis. It showed confidence in its cash position, expecting to generate approximately $11 billion in operating cash flow in 2024.
Philip Morris International Inc. (NYSE:PM) offers a quarterly dividend of $1.35 per share, having raised it by 3.8% in September this year. Through this increase, the company stretched its dividend growth streak to 15 years. The stock supports a dividend yield of 4.29%, as of November 11. It is one of the best stocks on our dividend contenders list.
9. ALLETE, Inc. (NYSE:ALE)
Dividend Yield as of November 11: 4.30%
ALLETE, Inc. (NYSE:ALE) is a Minnesota-based electric services company. It produces electricity using coal-fired plants and biomass combined with natural gas, hydroelectric power, wind, and solar energy. The company is actively working on multiple fronts to implement its Sustainability in Action strategy, alongside initiatives tied to the merger agreement with the Canada Pension Plan Investment Board and Global Infrastructure Partners.
In the third quarter of 2024, ALLETE, Inc. (NYSE:ALE) reported revenue of over $407 million, which showed a 7.5% growth from the same period last year. The company’s cash position was also stable as it ended the quarter with $102 million available in cash and cash equivalents, compared with $72 million nine months ago. Its total assets amounted to over $6.7 billion.
On October 25, ALLETE, Inc. (NYSE:ALE) announced a quarterly dividend of $0.705 per share, which was consistent with its previous dividend. Overall, the company maintains a 14-year streak of consistent dividend growth, which makes it one of the best stocks on our dividend contenders list. The stock’s dividend yield on November 11 came in at 4.3%.
The number of hedge funds owning stakes in ALLETE, Inc. (NYSE:ALE) grew to 30 in Q2 2024, from 22 in the previous quarter. These stakes have a total value of over $250 million.
8. Brookfield Infrastructure Partners L.P. (NYSE:BIP)
Dividend Yield as of November 11: 4.63%
Brookfield Infrastructure Partners L.P. (NYSE:BIP) is a Canadian limited partnership that focuses on acquiring and managing infrastructure assets worldwide. The company is highly diversified, enabling it to generate cash flows from various business segments, including utilities, transport, midstream, and data centers. Since the start of 2024, the stock has surged by over 13%, and in the past 12 months, it delivered nearly 39% return. The company is gaining traction among investors due to its growing assets. As of September 30, it has over $105 billion available in total assets.
In the third quarter of 2024, Brookfield Infrastructure Partners L.P. (NYSE:BIP) reported revenue of $5.3 billion, up from $4.5 billion in the same period last year. The company’s cash position was also strong, generating nearly $1.2 billion in operating cash flow during the quarter, compared with $1.1 billion in the prior-year period. It ended the quarter with over $1.6 billion in cash and cash equivalents.
On September 12th, Brookfield Infrastructure Partners L.P. (NYSE:BIP) completed the tuck-in acquisition of 76,000 telecom tower sites in India, making it the largest telecom tower operator in the country and the second-largest globally, with a total of over 250,000 tower sites. This acquisition complements its existing operations, enhancing and diversifying its tenancies from India’s second and third-largest mobile network operators, while also providing significant operational synergies.
On November 6, Brookfield Infrastructure Partners L.P. (NYSE:BIP) declared a quarterly dividend of $0.405 per share, which fell in line with its previous dividend. In 2024, the company achieved its 16th consecutive year of dividend growth, which makes BIP one of the best stocks on our dividend contenders list. As of November 11, the stock has a dividend yield of 4.6%.
7. Cogent Communications Holdings, Inc. (NASDAQ:CCOI)
Dividend Yield as of November 11: 4.89%
Cogent Communications Holdings, Inc. (NASDAQ:CCOI) is a multinational internet service provider company that offers services related to internet access and data transport. Oppenheimer highlighted the company in its recent investors’ note as the firm mentioned that the growing demand for data centers is surpassing infrastructure development, which is expected to result in capacity limitations by 2025. The surge in demand is driven by the need for vast computing power to support large language models and other artificial intelligence applications. The stock has surged by 6% since the start of 2024 and in the past 12 months, it has delivered a staggering return of 27%.
Cogent Communications Holdings, Inc. (NASDAQ:CCOI) reported mixed earnings in the third quarter of 2024. Its revenue for the quarter came in at $257.2 million, which fell by 6.6% from the same period last year. As vacancy rates rise and lease initiations or renewals decrease, leading to fewer tenants, the company has experienced a slowdown in new sales to corporate clients, which has adversely affected its corporate revenue. In addition, it continues to see reduced office occupancy rates across its properties in North America’s central business districts, mainly due to remote work policies introduced during the COVID-19 pandemic.
That said, Cogent Communications Holdings, Inc. (NASDAQ:CCOI) isn’t entirely a poor choice; it could still be a strong option from a dividend perspective. The company’s cash position is strong, with its trailing twelve-month levered free cash flow coming in at over $101 million. In the most recent quarter, it also generated $52.4 million in operating cash flow, which showed a significant growth from $22.2 million in the prior-year period. Alphyn Capital Management, in its Q3 2024 investor letter, also highlighted the company’s strong performance in its core operations. Here is what the firm has to say:
“In its latest earnings release, Cogent Communications Holdings, Inc. (NASDAQ:CCOI) reported steady, albeit unspectacular, performance in its core operations. There has been some progress on extracting cost synergies from the Sprint acquisition, and there is some potential for value creation through monetizing “hidden assets” from its IPv4 and data center co-location fees. The company has made progress in realizing cost synergies from the spring acquisition and may unlock additional value by monetizing “hidden assets” such as its IPv4 holdings and data center co-location fees. However, the crux of the investment thesis remains the potential for significant revenue growth from waves. Without this catalyst, I believe the stock could drop to the low $60s, but with waves revenues materializing, the upside potential could exceed $150.
It is interesting to see what happened with Lumen, a competitor to Cogent, after announcing a $5 billion deal to build a custom network for Microsoft’s data centers on July 24th. The stock jumped from around $1.50 to approximately $7 per share. From my understanding and based on reading a short seller report,2 Lumen is primarily acting as a contractor in this deal, and it is estimated to retain only $800 million in one-time profits from construction and only $21 million in recurring profits.
In contrast, Cogent has the potential to generate over $500 million in recurring operating profits3 if it can successfully sell its wave revenues over the next few years. The capital expenditure is much more limited, as Cogent is connecting an existing infrastructure that all its customers can use instead of a bespoke construction for just one customer. While I don’t expect the same dramatic market reaction as Lumen’s, Lumen’s stock rally was partly due to relief from its potential bankruptcy risk as the influx of cash will help manage its substantial $18 billion debt; I do think this situation reflects the market’s appetite for companies providing infrastructure critical to AI and cloud development.”
Cogent Communications Holdings, Inc. (NASDAQ:CCOI) is one of the best stocks on our dividend contenders list as the company has been growing its dividends consistently for the past 49 quarters. It currently pays a quarterly dividend of C$0.995 per share for a dividend yield of 4.89%, as of November 11.
6. Avista Corporation (NYSE:AVA)
Dividend Yield as of November 11: 5.00%
Avista Corporation (NYSE:AVA) is a Washington-based energy company that mainly transmits and generates electricity, as well as distributes natural gas to residential, commercial, and industrial customers. The company’s consolidated financial results show ongoing improvement from 2023. It remains focused on executing its regulatory strategy while working to recover costs across all its jurisdictions. In the past 12 months, the stock returned over 14% to shareholders.
In the third quarter of 2024, Avista Corporation (NYSE:AVA) recorded a revenue of $393.7 million, up 3.7% from the same period last year. Its cash position has remained somewhat stable as its trailing twelve-month operating cash flow is nearly $500 million. The company expects that the private equity markets, which influence valuations in its other businesses, will improve in the second half of 2024. This improvement has not occurred, leading the company to revise its consolidated earnings guidance down by $0.10, now forecasting earnings of $2.26 to $2.46 per diluted share for 2024.
Avista Corporation (NYSE:AVA) pays a quarterly dividend of $0.475 per share. It is one of the best stocks on our dividend contenders list as the company has raised its payouts for 22 years in a row. The stock supports a dividend yield of 5%, as of November 11.
5. LyondellBasell Industries N.V. (NYSE:LYB)
Dividend Yield as of November 11: 6.31%
LyondellBasell Industries N.V. (NYSE:LYB) is a Netherland-based multinational chemical company that specializes in plastics, chemicals, and refining. In the most recent quarter, the company commenced construction on its new MoReTec-1 facility in Germany, representing a key step forward in its commitment to a more sustainable future. This investment highlights LYB’s dedicated efforts to lead the industry in transitioning to a circular economy.
Despite difficult global macroeconomic conditions, LyondellBasell Industries N.V. (NYSE:LYB)’s robust North American operations enabled it to take advantage of favorable ethylene margins in the region. Through September, year-to-date demand in North America’s polyethylene and polypropylene sectors rose over 7% and 4%, respectively, compared to 2023. In the third quarter, the company’s volumes were bolstered by high operating rates at its crackers, which helped capture increased margins from merchant ethylene sales. Its revenue for the quarter came in at $10.32 billion, down 2.8% from the same period last year.
LyondellBasell Industries N.V. (NYSE:LYB) has consistently been a popular choice for dividend-focused investors. Its strong cash position has enabled substantial dividend distributions. In the third quarter of 2024, the company returned $479 million to shareholders through dividends and share repurchases. In addition, it generated $670 million in operating cash flow in Q3.
LyondellBasell Industries N.V. (NYSE:LYB) offers a quarterly dividend of $1.34 per share, growing it by 7.2% in May this year. This was the company’s 14th consecutive year of dividend growth. Its 5-year average annual dividend growth rate comes in at 4.79%. With a dividend yield of 6.31%, LYB is one of the best stocks on our dividend contenders list.
4. Pfizer Inc. (NYSE:PFE)
Dividend Yield as of November 11: 6.40%
Pfizer Inc. (NYSE:PFE) is an American multinational pharmaceutical and biotech company. Some investors might feel pessimistic about the company’s prospects, anticipating setbacks as COVID-related sales decrease and patents on key drugs expire. However, this outlook may be overly negative. Pfizer is actively working on a weight loss pill that it expects could be among the first of its kind to reach the market soon. In addition, the company’s strength lies in its diversified portfolio as it has always shown solid growth across multiple segments.
In the third quarter of 2024, Pfizer Inc. (NYSE:PFE) reported revenue of $17.7 billion, which saw a 32% growth from the same period last year. The revenue surpassed analysts’ estimates by $2.83 billion. During the quarter, the company also achieved remarkable growth in its Oncology segment. Notable revenue contributions came from products like Padcev, Xtandi, Lorbrena, and Braftovi/Mektovi, alongside meeting increased demand for Paxlovid during the recent COVID-19 surge.
Pfizer Inc. (NYSE:PFE) has increased its 2024 full-year revenue guidance by $1.5 billion at the midpoint, bringing the projected range to $61.0 to $64.0 billion. Additionally, it raised its adjusted diluted EPS guidance by $0.30 at the midpoint, now expecting $2.75 to $2.95 per share. This updated EPS guidance reflects the company’s strong year-to-date performance and sustained confidence in its business.
On October 9, Pfizer Inc. (NYSE:PFE) declared a quarterly dividend of $0.42 per share, which was in line with its previous dividend. The company has been making regular dividend payments to shareholders for the past 85 years and maintains a 14-year streak of consistent dividend growth. As of November 11, the stock has a dividend yield of 6.4%.
3. Verizon Communications Inc. (NYSE:VZ)
Dividend Yield as of November 11: 6.7%
Verizon Communications Inc. (NYSE:VZ) is a New York-based telecommunications company that offers services in communications, technology, information, and entertainment. Since launching its 5G network five years ago, the company has steadily expanded its reach. Backed by a strong spectrum portfolio and an extensive fiber optic network, it claims to offer the most reliable 5G service in the US, now covering more than 200 million people. In the past 12 months, the stock has surged by nearly 13%.
Verizon Communications Inc. (NYSE:VZ) has promising growth prospects ahead, especially with its $20 billion plan to acquire Frontier Communications, which would enhance its fiber network. Although the deal is still pending approval and would increase the company’s debt, it could boost long-term growth. If interest rates decline, managing debt could become easier and less concerning for investors, particularly if it continues to deliver solid performance. Third Point Management also highlighted the company’s acquisition in its Q3 2024 investor letter. Here is what the firm said:
“While some economic activity has been showing signs of slowing, the defensive composition of the current high yield market with a high mix of higher quality credit and short duration has let the rates tailwind overwhelm such concerns. The lowest quality sectors of the market have performed best, fueled by both soft/no landing expectations, as well as two positive events in the beleaguered telecom space. Telecom/cable have been poor performers year to date due to overhang from the growth of FWA (aka “wireless cable”) and increased fiber building, however the sector re-rated materially on two deals. Second, Verizon Communications Inc. (NYSE:VZ) announced a deal to acquire Frontier Communications (FYBR), a transaction which the fund benefited from by virtue of its investment in FYBR debt. This transaction, aimed at increasing’s VZ fiber footprint, has led to broad revaluation of fiber retail networks that we think is appropriate. While we continue to expect to see FWA rapidly erode non-upgraded cable and especially copper’s share of the low-end broadband market, the VZ deal underscores the value of the higher end footprint.”
In the third quarter of 2024, Verizon Communications Inc. (NYSE:VZ) reported revenue of $33.3 billion, which fell slightly by 0.02% from the same period last year. In the first nine months of the year, the company generated $26.5 billion in operating cash flow. Its free cash flow for the period came in at $14.5 billion.
On September 5, Verizon Communications Inc. (NYSE:VZ) announced a 1.9% hike in its quarterly dividend to $0.6775 per share. This marked the company’s 18th consecutive year of dividend growth. The stock has a dividend yield of 6.7%, as recorded on November 11.
2. Arbor Realty Trust, Inc. (NYSE:ABR)
Dividend Yield as of November 11: 11.00%
Arbor Realty Trust, Inc. (NYSE:ABR) is an American real estate investment trust company that invests in a diversified portfolio of finance assets in the multifamily and commercial real estate markets. Earlier this year, the company encountered challenges as federal prosecutors and the FBI launched an investigation into its commercial mortgage REIT. The investigation is centered on the company’s lending practices and the accuracy of claims about the performance of its loan portfolio. In response, the company emphasized its commitment to cooperating with regulatory inquiries and expressed confidence in its compliance with proper standards. Since the start of 2024, the stock has surged by over 4%.
Arbor Realty Trust, Inc. (NYSE:ABR) reported mixed earnings in the third quarter of 2024. Its revenue of $88.8 million fell by 17.2% from the same period last year. However, the revenue beat analysts’ expectations by $3.10 million. The company had approximately $600 million in cash and liquidity at the end of the quarter. Its cash position is also stable as its trailing twelve-month operating cash flow stands at $492 million.
Arbor Realty Trust, Inc. (NYSE:ABR) is an established player in the industry, having been in operation since 2003. Over the years, it has navigated significant economic challenges, including the Great Financial Crisis, the 2020 pandemic, and the post-inflation surge and Federal Reserve rate hikes in 2023. The company offers a quarterly dividend of $0.43 per share, translating to a dividend yield of 11%, as of November 11. With a track record of increasing dividends for the past 11 years, ABR stands out as one of the top dividend stocks on our dividend contenders list.
1. Delek Logistics Partners, LP (NYSE:DKL)
Dividend Yield as of November 11: 11.33%
Delek Logistics Partners, LP (NYSE:DKL) is an American logistics and midstream company that primarily provides transportation and storage services for crude oil, refined products, and other liquid hydrocarbons. The company remains a top choice in the midstream sector, offering an attractive mix of yield and growth. With the recent completion of its strategic initiatives, it is now positioned as a leading full-service midstream provider in the highly productive Permian Basin.
Delek Logistics Partners, LP (NYSE:DKL) generates substantial and stable cash flow by offering logistics services to its parent company, Delek US Holdings, as well as third-party clients. Recently, it updated and extended its agreements with Delek US for up to seven years, enhancing its long-term visibility. In the third quarter of 2024, the company’s operating cash flow amounted to $25 million. Its distributable free cash flow came in at $62 million, growing from $61.4 million in the prior year period.
On October 30, Delek Logistics Partners, LP (NYSE:DKL) announced a 0.9% hike in its quarterly dividend at $1.10 per share. This marked the company’s 47th consecutive quarter of dividend growth. The stock has a dividend yield of 11.33% as of November 11, which makes it one of the best stocks on our dividend contenders list.
While we acknowledge the potential of Delek Logistics Partners, LP (NYSE:DKL) , our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than DKL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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