By Ian Salisbury
With uncertainty still hanging over the markets, confidence is in short supply. Dividend hikes often signal company managers are bullish enough to sign up for a long-term commitment to return cash to shareholders.
One way for investors to own companies that consistently raise payouts is through an ETF, like the Vanguard Dividend Appreciation ETF. The $117 billion index fund targets companies that have raised dividends for at least 10 years.
There is a problem. Plenty of growth-oriented tech companies make minuscule payouts that they raise regularly but don't offer investors much in the way of income. Indeed, the fund's top holdings include Broadcom (with a yield of 0.8%); Apple (0.4%) and Eli Lilly (0.7%). Overall, the ETF boasts a yield of 1.6%, only slightly better than the S&P 500's anemic 1.2%.
To find something more appealing to income investors, we looked for stocks with higher yields where managers were still committed to increasing annual payouts. Our FactSet screen includes names with dividend yields of at least 5% that have increased their dividend payout rate at least once in the past five quarters. To screen out names with shaky financials, we also limited the list to companies whose dividends consume no more than 80% of profits and which Wall Street analysts expect to generate at least some profit growth this year.
In this low-yield market, the list generated just three names: Verizon Communications; Las Vegas focused real estate investment trust VICI Properties; and retailer Best Buy. All three stocks have had their issues lately -- that's inevitable when you hunt for yields that are so large relative to the market. But they also offer potential value.
Shares of Verizon are up 16% so far this year, although the telecom has badly lagged the market over the past five years thanks to intense competition and pricing pressure. Last October lead director Dan Schulman took the reins from CEO Hans Vestberg. Less than three months later, the company announced its largest-ever round of layoffs, cutting more than 13,000 jobs. In January, Verizon made headlines again, when a service interruption hit more than 180,000 customers.
Still, investors may be betting the company has turned the corner. Shares jumped nearly 12% on Jan. 30, when it reported better-than-expected fourth-quarter subscriber growth and revenue. Analysts expect earnings to grow 4% in 2026. Despite the recent gains, Verizon trades at less than 10 times forward earnings.
Verizon's dividend yield stands at 5.8%, after the company hiked its quarterly payout to 71 cents a share from 69 cents in January. The dividend's full-year cost of $2.84 a share looks solid, on pace to eat up only about 58% of Verizon's estimated $4.89 in 2026 profits.
Best Buy and VICI Properties could also be appealing turnaround stories. Best Buy's struggles in the e-commerce world are well known. But Wall Street analysts expect the company to eke out profit growth of 1% in 2026. The company, which increased its dividend by a penny to 96 cents last month, yields 6%.
VICI Properties, which owns a number of Las Vegas's key attractions, such as Caesars Palace and the Venetian Resort, has seen its share price slump as that city's casinos struggle to compete with online gaming. But as Barron's latest cover story noted , it's way too early to write Sin City off. Wall Street analysts forecast VICI's adjusted funds from operations, a real estate equivalent to operating profit, to grow 10% in 2026. The stock yields 6.5%.
Write to Ian Salisbury at ian.salisbury@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
April 08, 2026 15:44 ET (19:44 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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