Enterprise Products Partners and Verizon Extend Long Dividend Growth Records

New York — Two large-cap companies with long histories of raising shareholder payouts have again extended their streaks, underscoring their appeal to income-focused investors. Enterprise Products Partners and Verizon Communications each pushed their consecutive years of dividend growth higher, reinforcing confidence that the cash they generate is sufficient both to expand their operations and to reward owners.

Dividend-paying stocks have historically delivered stronger total returns than companies that do not distribute profits to shareholders. Over the past five decades, firms that regularly shared earnings with investors outpaced non-payers by more than two to one, according to research by Hartford Funds. The highest performance within that group came from businesses that increased their payouts year after year, a category that now includes a 27-year record from Enterprise Products Partners and a 19-year record from Verizon.

Enterprise Products Partners

The Houston-based master limited partnership has raised its quarterly distribution every year since it went public, moving the total increase over the past 12 months to roughly 4%. At today’s price, the units yield about 6.9%, far above the 1.2% average yield of the S&P 500. Management attributes the durability of the payment to the stability of the company’s fee-based midstream energy network, which moves and processes oil, natural gas and natural-gas liquids across North America.

During the third quarter, Enterprise generated $1.8 billion in distributable cash flow. That figure covered the distribution by a factor of 1.5, leaving $635 million available after payments to unitholders. Roughly $80 million of the excess went toward repurchasing common units, while the balance was directed to internal expansion projects.

The partnership also maintains what it describes as one of the strongest balance sheets in the midstream sector. Total debt sits at 3.3 times earnings before interest, taxes, depreciation and amortization, a leverage level paired with A-/A3 credit ratings from the major agencies. The financial position enables access to low-cost capital, a key consideration as Enterprise rounds out a multiyear growth program that began in 2022.

Capital expenditure is projected at $4.5 billion this year, financing new pipelines, storage facilities and petrochemical infrastructure. For 2026, management plans to invest an additional $2.2 billion to $2.5 billion as selected projects move from construction to operation. Once the current build-out phase winds down, rising revenue from the new assets and reduced construction spending are expected to lift free cash flow. Executives have signaled that surplus funds will support further distribution increases and additional unit repurchases; the board recently expanded its buyback authorization from $2 billion to $5 billion.

Verizon Communications

The telecommunications provider, headquartered in New York, extended its own dividend growth record to 19 consecutive years. Although the company did not release specific quarter-by-quarter cash-flow figures in the latest announcement, management emphasized that operating cash generation remains more than sufficient to cover capital requirements, network upgrades and shareholder distributions. Verizon’s ability to keep increasing its dividend stems from the recurring revenue it collects through wireless, broadband and enterprise services, segments that tend to generate predictable earnings even when economic conditions are mixed.

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In recent years the carrier has directed a substantial share of operating cash toward spectrum purchases and fifth-generation (5G) network deployment in the United States. The investments are designed to secure long-term growth by improving coverage and data speeds, while also defending competitive positioning against rival operators. Management has stated that the combination of continued network monetization and disciplined spending should allow the company to maintain its dividend policy without jeopardizing credit metrics.

Income and Growth Outlook

Enterprise Products Partners and Verizon approach shareholder returns from different industry vantage points, but their underlying strategies share several traits: both businesses generate sizeable, relatively stable cash flows; both maintain investment-grade credit ratings; and both allocate capital along a predictable path of reinvestment and distributions. For investors seeking reliable income that keeps pace with inflation, the continuation of multiyear growth streaks offers an additional layer of reassurance.

Market data suggest that companies with the willingness and capacity to raise payouts consistently can play an important role in diversified portfolios. While past performance is not a guarantee of future results, the persistent expansion of dividends by Enterprise Products Partners and Verizon indicates that each company remains confident in the durability of its cash generation and strategic direction.

Crédito da imagem: Verizon