3 Top Dividend Stocks I Wouldn't Hesitate to Buy With $1,000 Right Now

Key Points

• Brookfield Infrastructure has increased its dividend in all 16 years since its formation.

• PepsiCo has grown its dividend every year for more than half a century.

• VICI Properties recently extended its dividend growth streak to eight years.

• 10 stocks we like better than Brookfield Infrastructure ›

Buying dividend stocks is almost always a smart move, especially when focusing on companies that consistently raise their dividends. Historically, dividend stocks have outperformed those that do not pay dividends by more than two-to-one over the long term.

Brookfield Infrastructure (NYSE: BIPC)(NYSE: BIP), PepsiCo (NASDAQ: PEP), and VICI Properties (NYSE: VICI) have excellent records of increasing their dividend payments. With more growth very likely, I wouldn't hesitate to invest $1,000 into any one of them right now.

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Strong growth ahead

For 16 consecutive years, Brookfield Infrastructure has increased its dividend (every year since its formation). The global infrastructure operator has grown its payout at a 9% compound annual rate over that stretch. Currently, Brookfield's dividend yields 4.2%, which stands well above the S&P 500's 1.2% yield. At that yield, $1,000 invested in Brookfield would generate about $42 of annual dividend income.

The company backs its high-yielding payout with very stable cash flow. About 85% of Brookfield's funds from operations (FFO) come 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 rest to invest in expansion projects.

Brookfield expects a combination of inflation-driven rate increases, volume growth as the global economy expands, and expansion projects to boost its FFO per share by 6% to 9% each year. Additionally, it anticipates acquisitions driving FFO per share growth exceeding 10% annually -- Brookfield has already secured three deals worth $1.3 billion this year. Altogether, these drivers should support dividend increases of 5% to 9% per year.

Satisfying investors' thirst for dividends for decades

PepsiCo has increased its dividend for 53 straight years. That qualifies it for an elite group of dividend stocks known as Dividend Kings, companies that have achieved 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 has been working to transition 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.

A low-risk gamble 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.

Great dividend stocks to buy right now

Brookfield Infrastructure, PepsiCo, and VICI Properties all pair resilient cash flows with ongoing expansion initiatives, supporting their ability to pay reliable and steadily growing dividends. That combination of dividend sustainability and visible growth is why I would confidently invest $1,000 into any of them right now.

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Matt DiLallo has positions in Brookfield Infrastructure, Brookfield Infrastructure Partners, PepsiCo, and Vici Properties. The Motley Fool recommends Brookfield Infrastructure Partners and Vici Properties. The Motley Fool has a disclosure policy.