I like to buy dividend stocks. I like to collect the passive income they generate. Furthermore, dividend stocks have historically delivered much higher total returns than companies that do not pay dividends. That’s why they’re a no-brainer investment for me.
I like it to routinely add to my favorite dividend stocks every month. Two that are at the top of my buying list for November are Chevron (NYSE: CVX) And Vici properties (NYSE:VICI). This is why I plan to continue adding these top dividend stocks this month.
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Chevron is one of the best dividend stocks out there and has been increasing its payout for more than 35 years in a row. The oil giant increased its payment obligations by 8% earlier this year and has grown faster than its peers S&P500 in the past five years. Chevron is currently offering a very attractive dividend yield of over 4%, which is much higher than that of the S&P 500 (less than 1.5%).
The company should have enough fuel to increase its dividend in the future. Chevron expects to grow free cash flow by more than 10% annually through 2027. That forecast assumes an oil price of $60 per barrel, which is lower than the level of the past three years. Meanwhile, shareholders should benefit too, as the company uses some of that money to buy back shares. Chevron does plans to buy back $10 billion to $20 billion worth of stock annually, which is enough to retire 3% to 6% of the stock. outstanding shares. Its fortress-like balance sheet allows it to reach the lower end of that range even when crude oil prices average around $50 a barrel.
Meanwhile there is upside down to that plan as Chevron completes its groundbreaking acquisition of Hess. That deal would more than to double free cash flow by 2027, assuming an oil price of $70. The acquisition would also extend the outlook for manufacturing growth into the 2030s. That could give Chevron even more fuel to increase its dividend in the future.
Vici Properties has an excellent track record in paying dividends. The real estate investment trust (REIT), which focuses on experiential properties like casinos, has increased its payment every year since its founding seven years ago. It recently increased its dividend by 4.2% and has brought its payout to similar levels since its IPO.
The REIT’s dividend currently yields more than 5%. Vici Properties should be able to continue increasing its payout in the future. It has several growth drivers, including:
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Rent rises: A growing percentage of the rent Vici receives for its properties will rise with inflation in the coming years (40% in 2024 to 90% in 2035).
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Acquisitions: Vici Properties routinely acquires experiential properties rented to high-quality operators. It bought 38 bowling entertainment centers late last year for $432.9 million and Chelsea Piers in New York for $342.9 million.
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Partner Property Growth Fund: The REIT will provide capital to its partners to help improve and expand existing properties. For example, it was agreed to provide up to $700 million to finance various projects at the Venetian Resort in Las Vegas hotel room renovations and improvements to entertainment and convention centers.
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Credit investments: Vici will provide loans to support the expansion of new and existing partners. For example, it agreed to provide a $105 million construction loan to finance the development of a Margaritaville Resort. Many of the credit investments offer built-in growth opportunities to acquire real estate upon completion. It has the option to buy that Margaritaville Resort and various other sports facilities are also owned by the developer.
Vici Properties’ earnings should increase as the company expands its investment portfolio. That should allow the country to further increase its dividend.
I like to invest in companies that pay a high-yielding and growing dividend. That’s because it gives me an increasing stream of dividend income and a steady increase in stock prices. Chevron and Vici Properties have excellent results in both areas, that’s why I plan to buy more shares in November.
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Matt DiLallo has positions in Chevron and Vici Properties. The Motley Fool holds positions in and recommends Chevron. The Motley Fool recommends Vici Properties. The Motley Fool has a disclosure policy.
2 Top Dividend Stocks I Plan on Buying More of in November was originally published by The Motley Fool
