Investing in top-quality, high-yielding dividend stocks can be a reliable way to generate consistent income, especially during uncertain economic times. Many companies that offer resilient dividends provide stable payouts and increase them over time, ensuring that investors benefit from a growing stream of cash flow.
Notable among these are Capital Southwest (CSWC) and BCE (BCE), both of which boast a dividend yield exceeding 8% and a strong track record of consistent dividend payments.
These companies have proven the resilience of their payouts by maintaining or even enhancing dividends, regardless of market conditions. Let’s delve deeper to understand why these stocks are a buy right now.
Capital Southwest Stock
Capital Southwest Corporation (CSWC) is a business development company (BDC) that focuses on providing debt and equity financing to lower middle-market (LMM) companies. This unique niche allows CSWC to tap into an underserved segment of the market, generating steady returns through a combination of current income from its debt investments and potential capital gains from equity stakes. These earnings support the company’s consistent dividend payouts.
Capital Southwest's focus on LMM companies gives it an edge in the marketplace. These businesses often face limited access to capital and offer strong growth opportunities. By spreading its investments across various industries, regions, and markets, CSWC diversifies its portfolio, reducing risk and enhancing its overall return potential.
One of CSWC's highlights is its strong dividend track record. Recently, the company increased its regular quarterly dividend by 1.8% to $0.58 per share and announced an additional supplemental dividend of $0.06 per share. This demonstrates Capital Southwest’s commitment to returning value to its shareholders.
In addition to dividend growth, Capital Southwest has been expanding its total assets base and benefiting from improved operating leverage. Large investment opportunities in the LLM segment and enhanced operational efficiency strengthen the company’s foundation for future earnings growth and dividend payments.
Capital Southwest Corporation stock has a “Moderate Buy” consensus rating from analysts. At the same time, it offers a dividend yield of over 10%, making it an attractive option for investors seeking steady income.
BCE Stock
BCE (BCE) is Canada’s leading communications company, listed on both the Toronto Stock Exchange (TSX) and the New York Stock Exchange (NYSE). BCE offers a broad range of telecommunications services and is a dominant player in the Canadian market, particularly in Internet, television, and wireless services.
On Feb. 8, 2024, BCE announced a 3.1% increase in its annual dividend. This marks the 16th consecutive year the company has raised its dividend — a testament to its solid financial position and commitment to delivering value to its shareholders. For income-focused investors, this consistent dividend growth, paired with a high yield of over 8%, makes BCE an attractive stock to consider.
BCE’s vast wireline and wireless networks and multiple distribution channels give it a significant edge over competitors. The company is well-positioned to capitalize on the future growth potential of integrated wireless and wireline solutions.
Beyond telecom, BCE is transforming into a tech services and digital media company. It has expanded its offerings in cloud services, security, and managed automation, which has contributed to strong revenue growth in its business solutions segment. In addition, the company is gaining traction in 5G and Internet of Things (IoT) business-to-business (B2B) solutions, as seen in the increase in mobile-connected device activations. On the media side, BCE’s advanced advertising technology is driving digital ad revenue, adding another layer of growth potential.
BCE continues to grow not just organically, but also through strategic acquisitions, which will accelerate its revenue growth rate and strengthen its dividend payout potential.
While analysts currently give BCE a “Moderate Buy” rating, its history of dividend growth, attractive yield, and future growth prospects make it a solid pick for income-focused investors.
Bottom Line
These stocks provide both high yields and consistent dividend growth, offering a reliable income stream for investors looking to secure their financial future. Whether it’s Capital Southwest’s niche market strength or BCE’s expansion into tech and media, these companies are well-positioned to deliver value for years to come.
On the date of publication, Sneha Nahata did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
