Today’s article highlights an intriguing space to look for a top dividend stock: the infrastructure sector. Why? Well, let’s just say that U.S. infrastructure isn’t exactly in great condition. In fact, the American Society of Civil Engineers recently gave the nation’s infrastructure a grade of D+ in its recent infrastructure report card. Of course, as conservative income investors, we’d also like to see fat dividends being paid out to shareholders, a diversified business model, hefty cash flows, and a strong long-term track record of value creation. To be sure, there aren’t a lot of stocks that meet all of the criteria mentioned above. But I think I’ve found a company that comes very close to checking off all of those boxes...
Macquarie Infrastructure Corp (NYSE:MIC). Let’s dig into this top dividend stock, shall we? Of course, diversification is meaningless to us income investors if it doesn’t lead to stable cash flow. After all, if a company’s cash flow isn’t healthy, there is no way that the dividend can be. Happily for investors, Macquarie’s cash flow is in great shape. In Q1, adjusted free cash flow came in at $146.9 million. That is up 10.1% from $133.4 million in the year-ago period. Due to that strong production, management increased its first-quarter dividend 10% to $1.32 per share. In fact, Macquarie has grown its dividend at a prolific rate since 2011. Given a comforting free cash flow payout of about 75%, I don’t expect that growth to slow anytime soon.
Source: Income Investors
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- Warren Buffett's Two Investing Rules For Dividend Investors
- Dividend Stocks vs. Dividend ETFs
- Managing Risk With Dividend Stocks
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