When it comes to dividend income, I like companies that have demonstrated consistent dividend growth in the past and strong prospects to suggest this will continue in the future.
These three companies fit the bill and could grow your income over the next decade:
Australian Pharmaceutical Industries Ltd (ASX: API)
This pharmaceutical wholesaler has a very defensive business and strong consumer brands such as Priceline and Soul Pattinson which is related to API’s significant shareholder Washington H. Soul Pattinson and Co. Ltd (ASX: SOL).
API has a 10-year dividend growth rate of 26% and looking forward, I expect that to continue as the company benefits from a growing and ageing population.
API has a dividend yield of 5.3% and a pay out ratio of 64%
Macquarie Group Ltd (ASX: MQG)
Macquarie is more than just a bank. It’s one of the world’s top infrastructure investors and its asset management division provides consistent annuity income. It also invests in emerging industries such as renewable energy that could provide high rates of return going forward.
Macquarie has a 10 year dividend growth rate of 12.5%, a dividend yield of 4.7% and a pay out ratio of 63%.
BWP Trust (ASX: BWP)
Bunnings Warehouse is one of the best performing businesses out of all the subsidiaries owned by Wesfarmers Ltd (ASX: WES) with recent performance better than Coles, Kmart and Target.
One way to leverage off the continued performance of Bunnings is with an investment in BWP Trust, the largest owner of Bunnings Warehouse properties in Australia. BWP Trust has a portfolio of 80 stores with 99% occupancy rates.
BWP Trust has a 10 year dividend growth rate of 3.7%, a dividend yield of 5.5% and a pay our ratio of 100%.
If you are on the hunt for top dividend paying companies, I think you should also read this FREE report about these companies that are set to raise their dividends.
It's been a nail-biter of a reporting season here in the first half of 2018.
But the real action, in my opinion, is what companies are doing with dividends.
What does this mean for you? Well there is one stock I've found that could very well turn out to be THE best buy of 2018. And while there's no such thing as a 'sure thing' when it comes to investing - this ripper might come as close as I've ever seen.
You can follow Kevin on Twitter @KevinGandiya.
The Motley Fool Australia owns shares of and has recommended Washington H. Soul Pattinson and Company Limited and Wesfarmers Limited. The Motley Fool Australia has recommended BWP Trust. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.