3 High-Yielding Dividend Stocks That Have Doubled Their Payouts in 5 Years
Key Points
The stocks on this list pay between 2.8% and 6.4% in dividends.
They have significantly raised their payouts in recent years, and are in good positions to continue doing so.
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Dividend growth stocks can be attractive long-term buys, as the income they provide is likely to rise over time. But many stocks that have long streaks don't often raise their payouts at high rates, so while their streaks are getting longer, the increases don't often amount to much. Investors may be wondering what the point is at that stage, since it effectively becomes more about extending the streak rather than significantly growing dividend income.
The three dividend stocks on this list, however, have been generous with their dividend increases. They may not have exceptionally long track records of dividend growth, but over the past five years, they have more than doubled their payouts. The stocks I'm talking about are Tractor Supply Company (NASDAQ:TSCO), Zoetis (NYSE:ZTS), and Energy Transfer LP (NYSE:ET). They also have yields that are far higher than the S&P 500 average of just 1%.
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Tractor Supply Company
Tractor Supply Company sells essential products for farms, ranches, homes, and animals. The rural lifestyle retailer has thousands of stores throughout the country and has been around for over 85 years.
This year, however, the stock has struggled due to a poor outlook and weaker economic conditions, with discretionary spending down. The stock has fallen by more than 40% in just the past 12 months.
As a long-term investment, however, there may be some intrigue here from investors. It trades at 18 times earnings and yields 2.8%. Its current quarterly dividend is 24 cents. It did a 5-for-1 stock split in 2024, so the 52-cent dividend it was paying in 2021 is the equivalent of 10.4 cents on a split-adjusted basis. Thus, its dividend has increased by around 131% since then.
Although the stock hasn't been doing that well of late, its payout ratio remains manageable at around 50%, suggesting there may still be room for more increases in the future. For investors willing to hang on and be patient, this may be a good, undervalued stock to buy right now.
Zoetis
Zoetis is an animal health company that makes a wide range of products for animals, including vaccines and medicines. Its business can generate a steady stream of income due to the necessities it offers.
However, like Tractor Supply, it's also been struggling of late due to economic challenges and questions about its future growth. Things haven't been great, but the company's sales are still up 1% over the first six months of the year, and its profits have declined by a modest 3%. The panic in the market may be a bit extreme.
The sell-off in the stock has pushed its yield up to around 2.9%. Currently, it's paying investors 53 cents per share in dividends each quarter, up from 25 cents five years ago, which translates into an increase of 112%.
Its payout ratio is low at 34%, and at 12 times its trailing earnings, the stock's valuation is also low. For both contrarian and income-seeking investors, Zoetis is another stock that may prove to be an underrated buy in the long run.
Energy Transfer
Unlike the other stocks on this list, shares of Energy Transfer are up 24% over the past 12 months. The pipeline company has been benefiting from growing bullishness in the energy sector due to elevated oil prices. The company prides itself on "safely delivering America's energy" and being a key player in the sector.
During the first six months of the year, the company's revenue has grown by 54%, to $62.1 billion. Its business is benefiting from strong demand for natural gas liquids and increases in crude oil transportation.
Even with its share price rising considerably over the past year, the stock still offers the highest yield on this list, paying around 6.4%. Its quarterly dividend is currently 34 cents, and that has increased by 123% from five years ago, when it was paying 15.25 cents per quarter.
The company's distributable cash flow in the most recent quarter rose by 32%, to $2.59 billion. That's a good sign that not only is the dividend in good shape, supported by strong financials, but that there may still be more room for it to rise higher.
For investors looking for a top energy stock to buy that also pays a high yield, Energy Transfer could make for an excellent option right now.
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David Jagielski, CPA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tractor Supply and Zoetis. The Motley Fool recommends the following options: short October 2026 $35 calls on Tractor Supply. The Motley Fool has a disclosure policy.
