Have $1,000? 2 All-Weather Dividend Stocks to Buy and Hold Forever

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One of the keys to successful dividend investing is identifying companies that can consistently grow their dividend, even during turbulent times. These dividend stocks have historically produced market-beating returns. Because of that, dividend growth stocks can help investors compound their wealth, enabling them to grow a small initial investment into a much larger nest egg over time.

Two companies with a history of dividend growth are Realty Income (NYSE: O) and Brookfield Infrastructure (NYSE: BIPC) (NYSE: BIP) . They built their payouts to last, making them great dividend stocks to buy and hold for the long haul. That makes them ideal options for those with $1,000 to invest (or any amount, really), because they should grow that money steadily in the years to come.

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Living up to its name

Realty Income's strategy is to invest in net lease real estate (properties secured by leases where the tenant is responsible for real estate taxes, maintenance, and building insurance) because they deliver dependable rental income. That focus has enabled the real estate investment trust ( REIT ) to pay one of the sector's most consistent dividends. The company has increased its dividend 114 times since its initial public offering (IPO) in 1994, including in each of the last 97 straight quarters. That more than 25-year history of dividend growth puts it in the elite class of Dividend Aristocrats .

Overall, Realty Income has grown its dividend (which yields 4.2%) at a 4.5% annual rate. That dividend growth has played a key role in its ability to deliver a 15.1% total average annual return since its IPO. Put another way, that would have turned a $1,000 investment into more than $49,000 over the years.

The REIT expects to continue growing its dividend in the future. Several factors support that view. For starters, it has a conservative dividend payout ratio for a REIT, at 76.7% of its adjusted funds from operations (AFFO) as of the third quarter. Meanwhile, it has one of the strongest balance sheets in the REIT sector. That puts its current payout on rock-solid ground while giving it the financial flexibility to continue expanding its real estate portfolio.

It sees nearly limitless future growth potential. The REIT's focus on single-tenant net lease real estate represents a $12 trillion total addressable market opportunity. Because of that, it should have no problem finding acquisition opportunities to support continued dividend growth in the decades ahead.

Delivering dependable dividend income

Brookfield Infrastructure owns and operates a diversified portfolio of infrastructure businesses in the utility , energy midstream, transportation, and data sectors. These assets tend to generate relatively stable cash flow backed by long-term contracts and government-regulated rates. This steady income supports Brookfield's dividend, which currently yields 3.1%.

Brookfield has also increased its dividend every year since its formation in 2009. Overall, it has grown its payout at a 10% compound annual rate. That's helped fuel more than 18% of total average annualized returns for Brookfield's investors. That would have grown a $1,000 investment into more than $9,300 over that timeframe.

The company is targeting to grow its dividend by 5% to 9% annually in the future. It shouldn't have a problem delivering because it has a strong financial profile and ample growth opportunities. On the financial side, Brookfield has investment-grade credit and a conservative dividend payout ratio of around 60% of its funds from operations (FFO). Meanwhile, its organic growth drivers alone (inflation escalations on its existing contracts, higher volumes, and expansion projects) support its dividend growth plan.

In addition to organic growth, Brookfield has a long history of making value-enhancing acquisitions. It invested $2.5 billion late last year to acquire a Canadian midstream company and committed to investing $500 million to privatize a regulated utility in Australia. These deals will further boost its FFO per share in 2022 and beyond. Meanwhile, given the growing global need to fund infrastructure investments, it should have no shortage of acquisition opportunities in the future. Those future deals will provide additional fuel for dividend growth.

Durable dividend stocks

Realty Income and Brookfield Infrastructure are proven income stocks. They both have a long history of growing their attractive payouts. That growth isn't showing signs of stopping. The companies have the financial strength to capture the growth opportunities needed to keep increasing their payouts for years to come. That makes them ideal dividend stocks to own for the long haul.

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Matthew DiLallo owns Brookfield Infrastructure Corporation, Brookfield Infrastructure Partners, and Realty Income. The Motley Fool recommends Brookfield Infra Partners LP Units, Brookfield Infrastructure Corporation, and Brookfield Infrastructure Partners. The Motley Fool has a disclosure policy .

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