Unlock a Lifetime of Passive Income with These 3 Dividend Growth Stocks
As an individual investor, building a dividend income stream that can fuel your retirement dreams requires patience and strategic planning. While high-yield stocks may seem appealing, they often come with limited growth potential. Instead, consider investing in companies that have a proven track record of rapidly increasing their payouts.
Meet the Dividend Growth Champions
Archer-Daniels-Midland (NYSE: ADM), Hercules Capital (NYSE: HTGC), and Royalty Pharma (NASDAQ: RPRX) are three companies that have consistently raised their dividend payments over time. While their current yields may not be eye-catching, investors who hold these stocks for the long run could reap significant rewards.
Agricultural Powerhouse: Archer-Daniels-Midland
With a 3.4% dividend yield and an 8.6% annual payout growth rate since 2020, ADM is an attractive choice for income investors. As a leading agricultural supply chain manager and processor, the company has a vast global asset base that enables it to originate, process, and transport commodities between over 190 countries. With a history of reliable profits in both good and bad economic times, ADM is well-positioned to continue raising its dividend payout.
Specialized Financier: Hercules Capital
Hercules Capital is a business development company that invests in start-up businesses in the life sciences and technology industries. With a 9.5% yield and a supplemental dividend that has increased by 50% since 2020, this stock offers a compelling income opportunity. As a BDC, Hercules Capital avoids income taxes by distributing at least 90% of its profits to shareholders as a dividend, making it an attractive choice for income-focused investors.
Drugmaker Financier: Royalty Pharma
Royalty Pharma is a specialized finance business that focuses on drugmakers that need help paying for clinical trials. With a 3% dividend yield and a 40% payout growth rate since 2020, this stock offers a unique income opportunity. By investing in royalties on commercial-stage products, Royalty Pharma has deployed $15 billion worth of capital since 2020, with activity accelerating in recent quarters.
The Bottom Line
These three dividend growth stocks offer a compelling opportunity for investors seeking a lifetime of passive income. With a proven track record of rapidly increasing their payouts, ADM, Hercules Capital, and Royalty Pharma are well-positioned to deliver significant returns over the long run. By investing in these stocks now, you can unlock a lifetime of passive income and achieve your retirement goals.
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