Top 20 Safest High Dividend Stocks

High dividend stocks appeal to many investors in retirement because they provide generous passive income, especially in today's low interest rate world.

Many of the highest-paying dividend stocks offer yields in excess of 4%, and some even yield 10% or more. But not all high-yield dividend stocks are safe.

We reviewed 20 of the best high dividend stocks for safe income, providing analysis on each company. These high-yield stocks have an average dividend yield above 4%, maintain healthy Dividend Safety Scores, and have long track records of paying dividends without interruption.

By the way, many of the people interested in high dividend stocks are retirees looking to generate safe income from dividend-paying stocks. If that sounds like you, you might like to try our online product, which lets you track your portfolio’s income, dividend safety, and more.

You can learn more about our suite of portfolio tools and research for dividend investors by clicking here.

Chevron (CVX)

Sector: Energy
Dividend Yield: 3.49% (as of 5/10/22)
Dividend Safety Score: 65 (Safe)
Dividend Growth Streak: 34 years

Chevron was born from the discovery in 1879 of an oilfield near Los Angeles that yielded 25 barrels of oil per day. Today, Chevron is one of the largest oil companies in the world and produces over 3 million oil-equivalent barrels each day.

Exploring for and producing oil, gas, and liquefied natural gas generates the majority of profits, but Chevron also owns refineries that use crude oil to make petroleum products such as gasoline and petrochemicals.

Despite operating in a highly cyclical industry, Chevron and its predecessors have paid uninterrupted dividends since 1912. Many rivals have come and gone during Chevron's time, highlighting the skill it has taken for Chevron to flourish.

In short, Chevron has proven adept at managing costs (a must since profits are at the mercy of commodity prices) and making wise capital allocation decisions.

By acquiring rivals during downturns and continuously reinvesting profits to expand exploration and production of new oil and natural gas sources, Chevron has achieved a massive scale that gives the firm a lasting advantage over rivals.

For example, Chevron has developed a diverse portfolio of resources that include heavy oil, deepwater, natural gas, conventional oil, and shale. Moreover, Chevron's operations span the entire globe, with key production zones in North America, South America, Australia, Asia, and Africa.

This diverse asset base helps Chevron optimize its profitability through various commodity cycles and reduces the risk that any single project failure has a material impact on the firm, a luxury not afforded to smaller competitors.

Further strengthening the oil giant's competitive position is the firm's vertical integration. Chevron participates in all aspects of the fossil fuel business, such as manufacturing refined products like gasoline, diesel, and petrochemicals. These "downstream" operations use crude oil as an input and benefit from low oil prices, helping stabilize the company's cash flow during lean times.

Importantly, Chevron has managed to scale and diversify without sacrificing financial flexibility. The company maintains one of the strongest balance sheets in the industry and has earned a AA- credit rating from Standard & Poor's.

With relatively low leverage, Chevron can enter unpredictable downturns in oil prices with flexibility to make opportunistic investments and defend its dividend track record until the environment inevitable improves.

Duke Energy (DUK)

Sector: Utilities
Dividend Yield: 3.54% (as of 5/10/22)
Dividend Safety Score: 80 (Safe)
Dividend Growth Streak: 14 years

Founded in the early 1900s, Duke Energy is one of the largest regulated utilities in the U.S. with operations spanning the Southeast and Midwest. The company generates around 85% of its net income from electric utilities, 10% from gas utilities and infrastructure, and 5% from commercial renewables.

With more than 90% of earnings generated from regulated activities, Duke's predictable cash flow stream has enabled the firm to pay quarterly dividends for more than 90 years and increase its dividend each year since 2007.

Duke's favorable footprint should continue supporting a growing dividend. The company operates in four of the top eight states for population migration, including Florida (nearly 25% of net income) and the Carolinas (over 35% of profits).

Besides solid underlying customer growth, Duke's utilities are concentrated in areas that have historically constructive regulation. Weighted by rate base, activist investor Elliott Management estimated that Duke operates in the top 20% of jurisdictions in the country.

This is important because state utility commissions set the rates utilities are allowed to charge their customers and oversee a utility's investment plans.

Overall, Duke believes it is positioned to deliver 5% to 7% annual earnings per share growth over the long term as it continues investing in its infrastructure and building out its portfolio of renewables.

The dividend will grow at a somewhat slower pace for at least the next few years as Duke seeks to lower its payout ratio, but mid-single-digit growth is a reasonable longer-term expectation for income investors.

Brookfield Infrastructure Partners (BIP)

Sector: Utilities
Dividend Yield: 3.60% (as of 5/10/22)
Dividend Safety Score: 65 (Safe)
Dividend Growth Streak: 12 years
Brookfield Infrastructure Partners (BIP), a master limited partnership, owns a diversified portfolio of more than 30 infrastructure assets, including electrical transmission lines, railroads, ports, natural gas pipelines, toll roads, telecom towers, and data centers.
About 95% of BIP's cash flow is supported by regulated or long-term contracts, approximately 75% is indexed to inflation, and around 60% has no volume risk. Most of the firm's customers have investment-grade credit profiles as well, reducing risk that they won't meet their obligations.
These qualities have enabled BIP to grow its distribution each year since the firm was spun off from Brookfield Asset Management in 2008. Going forward, management expects the firm to continue meeting its 5% to 9% annual distribution growth target.
Growth will be driven by inflationary price increases, volume upside from global GDP growth, and reinvested cash flow across BIP's large backlog, all supported by the firm's BBB+ investment grade credit rating. 
Income investors attracted to BIP's critical infrastructure and unique combination of income and growth should be aware of the partnership's structure for tax purposes.
Unlike many limited partnerships, BIP can be owned in retirement accounts since it does not generate unrelated business taxable income. However, investors will receive a K-1 form for positions held in taxable accounts.
Investors looking to avoid K-1 tax forms for greater simplicity should note that BIP in 2020 split its shares to create Brookfield Infrastructure Corporation (BIPC). BIPC provides an equivalent economic return to BIP and has the same payout, but its corporate structure means its investors receive common dividend reporting slips.
But both entities face unique tax consequences. As a Canadian company, BIPC withholds 15% of its distribution to U.S. investors who hold shares in taxable accounts. Investors may be able to claim a foreign tax credit. 
Meanwhile, BIP is domiciled in Bermuda. A significant portion of its distributions are generated here and are fully taxable as ordinary dividend income rather than at the lower rate enjoyed by qualified dividends. 
A small portion of BIP's distributions come from dividends generated in the U.S. and Canada. These are considered qualified dividends, and U.S. investors may face withholding taxes on the Canadian payouts.
For simplicity's sake, it may be ideal to hold BIP or BIPC in retirement accounts to avoid some of these issues. 

Canadian Natural (CNQ)

Sector: Energy
Dividend Yield: 3.95% (as of 5/10/22)
Dividend Safety Score: 70 (Safe)
Dividend Growth Streak: 20 years

Canadian Natural is the largest heavy crude oil producer in Canada as well as the nation's largest independent natural gas producer. Unlike its integrated peers which operate midstream and marketing businesses, the company generates virtually all of its profits from upstream activities.

Despite its sensitivity to oil prices, Canadian Natural has managed to pay higher dividends for 20 consecutive years.

This impressive track record is due to the firm's large scale, quality resource base, financial conservatism, and ownership of midstream assets, which reduce its transportation costs and help its production reach international markets with the best pricing.

Compared to conventional oil producers, Canadian Natural's asset base is also unique given its concentration in Canada's oil sands.

Oil sand is a heavy mixture of bitumen, sand, fine clays, and water. Because it does not flow like conventional crude oil, it must be mined or heated underground before it can be processed, resulting in relatively high fixed costs.

However, the long-life, low-decline nature of oil sands reserves results in a minimal cost to sustain production; Canadian Natural estimates that it can cover its dividend and sustaining capital expenditures at an oil price near $30 per barrel.

Management also runs the business using a conservative amount of leverage, earning Canadian Natural an investment grade credit rating. This provides cushion for the firm to lean on its balance sheet during downturns to support the dividend.

Overall, investors considering the stock should understand that this is a highly volatile business, driven by Canadian Natural's concentration on upstream activities and the challenges that come with producing oil further from desirable markets such as the U.S. Gulf Coast.

Dividend growth any single year is influenced heavily by prevailing oil and gas prices as well. However, we expect Canadian Natural to remain one of the few reliable bets for income in the challenging energy sector.

Consolidated Edison (ED)

Sector: Utilities
Dividend Yield: 3.31% (as of 5/10/22)
Dividend Safety Score: 90 (Very Safe)
Dividend Growth Streak: 47 years

Since its formation in 1823, Consolidated Edison has provided electric, gas, and steam energy services for customers in New York City and surrounding areas.

The regulated utility's predictable returns over the decades have allowed management to raise Con Edison's for 47 straight years, the longest period of consecutive annual payout raises of any S&P 500 utility company.

While the New York City region has experienced several years of population losses as residents seek cheaper options, especially in response to the pandemic, it still has an insatiable need for reliable, increasingly clean electricity.

This provides investment opportunities for Con Edison to strengthen the grid and participate in the clean energy transition, including efforts across energy efficiency projects, electric vehicle charging stations, and battery storage.

Overall, management expects the utility over the next five years to deliver 4% to 6% annual earnings per share growth, which should help Con Edison extend its dividend growth streak.

The company does face elevated political and regulatory pressures over its response to a 2020 tropical storm, which caused widespread power outages. But Con Edison's long-term relationships and A- credit rating seem likely to help it navigate these challenges without jeopardizing its slow-growing dividend.

Enterprise Products Partners (EPD)

Sector: Energy
Dividend Yield: 7.09% (as of 5/10/22)
Dividend Safety Score: 65 (Safe)
Dividend Growth Streak: 23 years
Enterprise Products Partners is one of North America's largest midstream master limited partnerships, with about 50,000 miles of natural gas, natural gas liquids, crude oil, refined products, and petrochemical pipelines. The firm also owns a number of storage facilities, processing plants, and export terminals.

Enterprise’s network of assets is connected to nearly every major U.S. shale basin, helping move different types of energy and fuel from one location to another for upstream exploration and production companies. The firm is also one of the largest exporters of crude oil, as well as NGL and NGL-derived products.
The company has paid uninterrupted distributions since going public in 1998 largely due to its business model, which is less sensitive to oil & gas prices than one might initially think. This is because most of Enterprise’s cash flow is protected by long-term, fixed-fee contracts with minimum volume guarantees and annual rate escalators to offset inflation.
Enterprise has also reduced its risk profile by implementing a more conservative self-funding business model. Under this structure, Enterprise does not need to issue equity to fund part of its expansion projects. Instead, the firm uses a mix of internally generated cash flow and debt, reducing its financing risk and lowering its cost of capital. 
Coupled with a strong BBB+ credit rating and conservative payout ratio below 70%, Enterprise's distribution should continue flowing for the foreseeable future despite the energy sector's volatility.


Sector: Utilities
Dividend Yield: 3.81% (as of 5/10/22)
Dividend Safety Score: 99 (Very Safe)
Dividend Growth Streak: 34 years

UGI became America's first public utility holding company when it was founded back in 1882 in eastern Pennsylvania. 

Today, the company is an international distributor and marketer of energy products and services, including natural gas, propane, electricity, and renewable solutions.

UGI's most stable business is its regulated gas utilities serving nearly one million customers throughout Pennsylvania and West Virginia, responsible for around 20% of revenues.  
The largest portion of UGI's business involves propane distribution throughout Europe and the U.S. (through the AmeriGas brand), collectively accounting for over half of revenues. Propane is used primarily for home heating, water heating, and cooking purposes.

UGI's businesses have proved solid cash flow generators over the years, thanks to the essential nature of their services. Even during the financial crisis of 2007-09 and the pandemic of 2020, cash flow from operations held steady and grew. 

As such, UGI has paid a dividend without interruption since 1885.  The company has even increased its dividend every year since 1988.

In addition to reliable cash flows, UGI has an investment-grade credit rating from Fitch, a healthy balance sheet, and a conservative payout ratio policy to handle periodic volatility in the propane business. 

While the world increasingly demands cleaner energy sources, creating a fuzzier long-term outlook for natural gas and propane, this transition will play out over many years. UGI is expanding its exposure to renewable gases and other energy sources like hydrogen.

For now, UGI appears reasonably positioned to adapt while remaining committed to its dividend. 

Main Street Capital (MAIN)

Sector: Financials
Dividend Yield: 6.50% (as of 5/10/22)
Dividend Safety Score: 62 (Safe)
Dividend Growth Streak: 11 years
Founded in Texas during the mid-1990s, Main Street Capital is a business development company, or BDC. Most BDCs in our coverage maintain speculative Dividend Safety Scores, reflecting the inherent risks of their business models.
BDCs primarily provide debt and equity capital to relatively small, highly levered companies that aren't able to access traditional financing from banks. 
Handing out loans with double-digit yields in a zero interest rate world is a dangerous game that's only magnified with the use of leverage. And competition to win business is tremendous with private funds awash in cheap capital and many investors hungry for yield.
When the tide goes out during economic downturns, BDCs can face a wave of loan defaults that puts their dividends on the chopping block. 
Main Street has separated itself from the pack and boasts a track record of never decreasing its regular monthly dividend since making its first payout in 2007, a stretch that includes two recessions. 
Main Street's success starts with its diversified investment portfolio, which consists of more than 150 companies. Its largest investment represents about 3% of the portfolio's income, and no industry exceeds 7% of the portfolio's value.
Spreading its bets across many different investments and end markets helps insulate Main Street Capital from distress in any single company or industry.
Most of the firm's investments are also in first-lien secured loans, which are paid first when a borrower defaults and give Main Street the right to seize property if its loans are not repaid. This reduces the risk of major loan losses during downturns. 
Main Street also maintains much less leverage than is allowed by regulators, helping it earn a BBB- investment grade credit rating. And management retains a portion of gains realized upon the exit of successful investments to provide additional financial flexibility. 
These funds (known as "spillover") provide an offset against the inevitable credit losses that will be experienced when making investments in non investment-grade debt securities.
Overall, Main Street is one of few BDCs for conservative income investors to consider. The firm is not immune from the industry's challenges, but Main Street is one of the best positioned BDCs to maintain its dividend in good times and bad.

Medical Properties Trust (MPW)

Sector: Real Estate
Dividend Yield: 6.42% (as of 5/10/22)
Dividend Safety Score: 70 (Safe)
Dividend Growth Streak: 9 years

Formed in 2003, Medical Properties Trust (MPW) is one of the world's largest owners of hospitals with around 400 facilities and more than 40,000 beds. The REIT's properties are leased or mortgaged by over 50 hospital operating companies throughout the U.S. (58% of assets), U.K. (22%), Germany (6%), Switzerland (6%), and Australia (5%).

MPW's properties are essential to delivery of health care to their surrounding communities. This results in a sticky business, and over 90% of MPW's properties are under long-term master lease agreements with cross-default provisions or parent guarantees to provide additional cash flow security.

These terms allow MPW to replace a struggling tenant with a different operator "long before there is a payment default" to minimize disruption, according to management.

Besides maintaining a favorable lease structure, MPW is reasonably diversified. The firm does have two large clients – Steward Health Care (24% of rent) and Circle Health (12%) – but no individual facility exceeds 3% of its investment portfolio, and its tenants have solid rent coverage ratios.

MPW has raised its dividend every year since 2013, with average annual growth of about 4%. This will likely continue as only a small percentage of the world's acute hospitals are leased, providing MPW with opportunity to keep acquiring more facilities.

Toronto-Dominion (TD)

Sector: Financials
Dividend Yield: 3.92% (as of 5/30/22)
Dividend Safety Score: 80 (Safe)
Dividend Growth Streak: 11 years

Toronto-Dominion Bank's (TD) earliest predecessor was founded in 1855 by a group of millers and merchants to provide essential financial services to Canada's emerging grain industry. Today, TD is one of North America's largest banks.

Unlike many big banks, TD has little exposure to investment banking and trading operations, which tend to be more cyclical and riskier businesses.

Instead, the retail bank's revenue is balanced between simple lending activities (mortgages, auto loans, commercial financing, etc.) and fee-based businesses such as insurance, card services, asset management, and brokerage services.

Banking is largely a commodity product, with consumers and businesses seeking access to dependable financing at the lowest interest rate possible. Banks with the largest low-cost deposit bases (i.e. cheap sources of funding to use for lending), most efficient operations, and conservative risk management practices tend to be best off.

TD checks all of these boxes but also benefits from generating about 60% of its net income in Canada, where the banking sector effectively operates an oligopoly and has enjoyed remarkable stability for over a century.

Coupled with TD's AA- credit rating, healthy capital levels, and focus on relatively stable retail businesses, the bank's conservatism has enabled it to pay uninterrupted dividends dating back to 1857.

While banking is a complex and cyclical industry for dividend investors to navigate, TD is a standout business that appears built to last.

Note that as a Canadian company, dividends paid by TD to U.S. investors are subject to a 15% withholding tax. Investors can avoid this tax by holding TD in retirement accounts. Otherwise, with some additional paperwork, investors can generally claim a tax credit with the IRS to offset the withholding tax.

National Retail Properties (NNN)

Sector: Real Estate
Dividend Yield: 4.96% (as of 5/10/22)
Dividend Safety Score: 70 (Safe)
Dividend Growth Streak: 32 years

National Retail's roots trace back to 1984 when restaurant chain Golden Corral formed a REIT to acquire its properties and lease them back. Today, National Retail owns over 3,000 properties across America, leased to more than 350 tenants in over 30 industries.

The retail REIT's business model has delivered predictable results for decades. National Retail maintains a well-diversified portfolio with no industry exceeding 20% of rent, no tenant is larger than 5% of rent, and the portfolio is spread across the U.S. with no major geographic concentration.

Management has also prioritized avoiding retail categories that are most susceptible to the threat posed by e-commerce. With no malls or strip centers in the portfolio either, National Retail can more easily replace weaker tenants and repurpose its properties as needed.

These properties have helped the REIT maintain excellent occupancy rates and dividend coverage over time. As a result, National Retail has rewarded shareholders with higher dividends each year since 1990.

With a diversified portfolio, BBB+ credit rating, and conservative payout ratio policy, the company's dividend seems likely to remain safe and growing for years to come.

Old Republic International (ORI)

Sector: Financials
Dividend Yield: 4.07% (as of 5/10/22)
Dividend Safety Score: 73 (Safe)
Dividend Growth Streak: 40 years

Founded in 1923, Old Republic is a commercial lines underwriter, mostly in the general insurance (54% of operating income – workers compensation, trucking insurance, home warranty, aviation, etc) and title (42% – offered to real estate purchasers) fields.

While insurance services are necessary and often mandated in the sectors served by Old Republic, this is a cutthroat industry with numerous firms competing primarily on price (and distribution). Long-term success is all about risk management, which Old Republic has excelled at over time.

The firm’s General Insurance segment has recorded combined ratios below industry averages for 41 of the last 50 years, demonstrating management’s disciplined underwriting process. The insurer also has minimal property/catastrophe exposure within the business it underwrites, reducing the risk of major losses.

Old Republic’s title insurance operation is the third largest in the country and operates quite differently from general insurance since the full premium is collected upfront, and losses tend to be minimal. This provides the firm with nice diversification, further reducing underwriting volatility.

Thanks to these qualities, Old Republic has paid uninterrupted dividends since 1942 and increased its dividend each year for the past 40 years. Management's conservatism, also reflected in Old Republic's low leverage ratio and substantial capital reserves, should ensure those trends continue.

Phillips 66 (PSX)

Sector: Energy
Dividend Yield: 4.04% (as of 5/10/22)
Dividend Safety Score: 65 (Safe)
Dividend Growth Streak: 9 years

Phillips 66 is a diversified petrochemical company that refines crude oil and natural gas into fuels and petrochemicals, operates gas stations in the U.S. and Europe, and owns stakes in two midstream MLPs that transport fuels.

Phillips 66's earnings are hard to forecast as they depend largely on unpredictable swings in commodity prices (crude oil, natural gas, gasoline, ethylene, etc), which are in turn based on ever-shifting trends in supply and demand.

Moreover, the diversified nature of Phillips 66's operations means that fluctuations in commodity prices can have both favorable and unfavorable impacts on the business. For instance, refining can be more profitable when oil prices are low, whereas midstream firms benefit from high oil prices.

Fortunately, refiners like Phillips 66 plan for volatile cycles — it's the nature of their business.

Management has prioritized maintaining a strong balance sheet, earning Phillips 66 a BBB+ investment grade credit rating. This provides the firm with flexibility to plug short-term cash flow deficits during cyclical downturns without jeopardizing the dividend.

As a result, the company has paid safe and growing dividends since it was spun off from ConocoPhillips in 2012. However, investors considering the stock need to be comfortable with its high volatility and understand that the dividend's pace of growth is sensitive to refining industry's underlying conditions.

Leggett & Platt (LEG)

Sector: Consumer Discretionary
Dividend Yield: 4.52% (as of 5/10/22)
Dividend Safety Score: 70 (Safe)
Dividend Growth Streak: 50 years

Founded in 1883, Leggett & Platt patented the first steel coil bedspring that would shape the way the world sleeps. The company has since become a diversified manufacturer of engineered components such as mattress springs and foams, recliner mechanisms, adjustable beds, steel wire, seat frames, carpet cushion, and armrests.

Leggett & Platt generates about half of its revenue from bedding components, with most of the rest from automotive, flooring, and furniture end markets. Consumer spending drives the company's results.  

Despite operating in cyclical markets, Leggett & Platt has paid higher dividends every year since 1972. This impressive track record reflects the company's focus on dominating niches that can deliver predictable cash flow.

The markets Leggett & Platt competes in generally have a slow pace of change. While the processes and materials used to produce certain goods evolve over time (e.g. foam mattresses), the problems solved by mattresses and furniture are timeless. 

About two thirds of bedding and furniture purchases are also made to replace existing products, making it more difficult for new entrants to quickly take market share or capitalize on emerging trends.

Most of Leggett & Platt's products have long life cycles as well, so the company doesn't have to continuously redesign them to maintain its long-standing relationships with customers. Coupled with its entry into key markets many decades ago, Leggett & Platt has built No. 1 or No. 2 market share positions in most of its categories.

Coupled with the firm's BBB- investment grade credit rating, consistent profitability, and conservative capital allocation, Leggett should have a long runway to continue paying steadily rising dividends.

Realty Income (O)

Sector: Real Estate
Dividend Yield: 4.53% (as of 5/10/22)
Dividend Safety Score: 70 (Safe)
Dividend Growth Streak: 27 years

Realty Income, a member of the dividend aristocrats index, has paid higher dividends every year since going public in 1994.

The retail REIT owns over 6,600 properties that are leased out to around 600 clients operating across more than 50 different industries.

Realty Income's diversification and focus on long-term leases in essential industries have created a very predictable cash flow stream.

No tenant exceeds 6% of revenue, no industry is greater than 12%, and no state accounts for more than 11% of revenue. Convenience stores, grocery stores, drug stores, and dollar stores are Realty's largest exposures and collectively account for nearly 40% of revenue, providing a solid foundation of recession-resistant tenants.

Management runs the business conservatively, too. Realty Income is one of only a handful of REITs to earn an A- investment grade credit rating or higher, reflecting the quality of its portfolio and the firm's low leverage. Half of its tenants have investment-grade ratings as well.

Despite a challenging environment during the 2020 pandemic which forced many retailers to temporarily close, Realty Income continued covering its monthly dividend with cash flow. Income investors can likely continue depending on the stock for safe, growing dividends.

Southern Company (SO)

Sector: Utilities
Dividend Yield: 3.63% (as of 5/10/22)
Dividend Safety Score: 65 (Safe)
Dividend Growth Streak: 20 years

Southern Company is one of the largest producers of electricity in the U.S. and has been in business for more than 100 years. The Atlanta-based company supports 9 million customers primarily in the Southeastern U.S. with electric utilities in three states (around 80% of profits) and natural gas distribution utilities in four (15%).

Many utility companies are essentially government-regulated monopolies. The high cost of building and maintaining power plants, transmission lines, and distribution networks makes it uneconomical to have more than one utility supplier in most regions.

In exchange for their rights to operate as sole suppliers within their service territories, regulated utilities are subject to oversight by their respective state utility commissions, which control the rates charged to customers and approve investment plans.

Southern's footprint is favorable from a regulatory perspective. Alabama accounts for around 30% of the utility's net income and has the most constructive regulatory environment of any state, according to RRA rankings. Georgia (over 40% of profits) is also ranked among the top five states.

Besides maintaining favorable regulatory relationships, Southern's geographic footprint gives it one of the stronger underlying growth profiles in the sector. Georgia has exhibited top-quartile population growth from 2010 to 2021, and the Southeast region in general has reported job and population growth that outpaces the national average.

Thanks to these qualities, plus the essential nature of utility services, Southern has paid uninterrupted dividends since 1948 and raised its dividend every year since 2002.

Looking ahead, management targets long-term earnings per share growth between 5% and 7% annually. The dividend could grow at a somewhat slower pace as Southern works to get its payout ratio more in line with its peers, but long-term investors can probably expect mid-single-digit payout growth.

Universal Health Realty Income Trust (UHT)

Sector: Real Estate
Dividend Yield: 5.66% (as of 5/10/22)
Dividend Safety Score: 65 (Safe)
Dividend Growth Streak: 36 years

Universal Health commenced operations in 1986 by purchasing properties from hospital operator Universal Health Services (UHS) and immediately leasing them back to UHS under long-term contracts.

While UHS-related tenants still account for around 30% of UHT's rental revenue, the healthcare REIT has expanded its portfolio to more than 70 properties, including medical office buildings (71% of assets), acute care hospitals (16%), behavioral health facilities (5%), and emergency departments (4%).

Tenants occupying these properties, including UHS, generally maintain high rent coverage ratios and generate recession-resistant cash flow. This predictable earnings stream has allowed UHT to pay higher dividends every year since its founding.

Unlike most stocks that consider raising their payouts annually, UHT usually increases its dividend twice per year. However, dividend growth has averaged less than 2% per year.

Income investors should probably expect a similarly slow pace of dividend growth going forward, but UHT's strong portfolio of essential healthcare properties makes it a reliable dividend stock that should benefit from America's aging demographics.

Verizon (VZ)

Sector: Communications
Dividend Yield: 5.20% (as of 5/10/22)
Dividend Safety Score: 87 (Very Safe)
Dividend Growth Streak: 15 years

Verizon routinely earns the highest marks for network reliability, speed, and performance thanks to its relentless focus on its core wireless service business. The firm's network leadership position has been built over decades and at a cost of hundreds of billions of dollars.

As long as Verizon continues investing in its leading network coverage and architecture, the company should continue maintaining a massive base of subscribers.

Disrupting Verizon’s customer base would be almost impossible barring a revolutionary change in network technologies given the firm's scale, capital intensity, brand recognition, hard-to-replicate network assets, and mission-critical services.

These qualities have helped Verizon and its predecessors pay uninterrupted dividends for more than 30 consecutive years. Dividend growth has averaged around 2% annually, a pace that seems likely to continue as Verizon balances investments to rollout 5G service with returning capital to shareholders.

Washington Trust Bancorp (WASH)

Sector: Financials
Dividend Yield: 4.50% (as of 5/10/22)
Dividend Safety Score: 76 (Safe)
Dividend Growth Streak: 11 years

Founded in 1800, Washington Trust Bancorp is the oldest community bank in America. The small-cap bank primarily serves Rhode Island and generates around half of its revenue from lending operations, with fees from mortgage banking and wealth management accounting for most of the remainder.

The bank prides itself on prudent underwriting standards. During the 2007-09 Great Financial Crisis and 2020 pandemic, Washington Trust experienced lower loan losses compared to its peers. Even in the event of a severe global recession, management's stress tests suggest the bank would remain well-capitalized and positioned to maintain its dividend.

Coupled with Washington Trust's diverse income stream, which includes a high mix of stable fees from businesses such as wealth management, the company has paid reliable dividends every year since 1992. Despite the financial sector's volatility, income investors can likely count on this trend continuing.

W. P. Carey (WPC)

Sector: Real Estate
Dividend Yield: 5.43% (as of 5/10/22)
Dividend Safety Score: 73 (Safe)
Dividend Growth Streak: 23 years
W.P. Carey was founded in 1973 and converted to a REIT structure in 2012. The firm ranks among the largest net lease REITs with a portfolio of more than 1,200 properties located primarily in the U.S. (around 60% of rent) and parts of Europe (35%).
The firm focuses on single-tenant industrial (25% of rent), warehouse (22%), office (22%), retail (18%), and self-storage (5%) properties that are leased to more than 350 tenants, none greater than 4% of rent. 
This diversification, coupled with long-term leases that have built-in rent escalators, has helped W.P. Carey generate a very predictable stream of cash flow that has enabled dividend growth ever year since the firm went public in 1998.
The REIT's dividend has grown at a low single-digit pace in recent years, a trend we expect will continue as management continues strengthening W.P. Carey's investment grade balance sheet and payout ratio.

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