If you want income from your portfolio, there's no substitute for great dividend stocks. By investing in businesses that can produce long-term growth as well as make regular dividend payments to their shareholders, you'll dramatically improve your chances of meeting your financial goals while also benefiting from the liquidity that dividend income provides.
We're not even three months into 2019 yet, but already, several high-profile companies have rewarded their shareholders with dividend hikes. Among them are Oracle (ORCL -0.30%), Texas Roadhouse (TXRH 1.55%), and Vail Resorts (MTN -0.14%). Below, we'll look more closely at these companies to see what the future could hold for them.
Building a database of dividends
Like many companies, Oracle was late to the dividend game, and even now, its payout doesn't look all that impressive on paper. But even though the database giant has a dividend yield of just 1.8%, the $0.24-per-share dividend it'll now send to its shareholders represents a 26% increase from what it paid last quarter.
Image source: Oracle.
Fundamentally, Oracle has seen challenging times. Its overall revenue growth has been stagnant, and net income in its most recent quarter actually fell from year-earlier levels, forcing Oracle to rely on buyback activity in order to boost its per-share earnings. Even as the company has pushed into higher-growth areas like cloud computing, it's been unable to generate the kind of sales gains that peers in the space have enjoyed.
For dividend investors, Oracle's quarterly payouts have doubled since 2015, but increases have been irregular. Until the company regains its footing, Oracle isn't quite the sure thing that many investors who focus on dividend income prefer for their portfolios.
Serving up sizzling quarterly payments
Texas Roadhouse recently announced that it would pay shareholders $0.30 per share on a quarterly basis. That's up 20% from its previous payout, and it helps increase the yield on the steakhouse restaurant chain's stock to about 2%. The company has done a good job of keeping shareholders happy, instituting a regular quarterly dividend in 2011 and making regular annual increases to the payout ever since.
Even in a challenging environment for the restaurant industry, Texas Roadhouse has stood out from the crowd. In its most recent quarter, revenue climbed 11%, helping to boost net income by 6%. Solid comparable-restaurant sales gains helped drive the steakhouse chain's success, and Texas Roadhouse has continued to expand successfully by adding new restaurant locations both in the U.S. and around the world. The restaurant company isn't without its challenges, but Texas Roadhouse has been good both for its patrons and its shareholders.
Check out the latest earnings call transcripts for Oracle, Texas Roadhouse, and Vail Resorts.
Money's coming over the mountain
Finally, Vail Resorts upped its dividend payment recently. The ski resort operator said that it will now pay a whopping $1.76 per share in quarterly dividends, up from $1.47 per share in the previous quarter. That marks the latest move in a decade that has seen Vail boost its payout nearly tenfold, with eight dividend increases since 2011.
Vail struggled late last year when it reported that it was seeing weaker traffic than it had expected, defying positive expectations during a period of extremely favorable weather conditions over much of the ski resort operator's network of properties. However, in its most recent report, Vail said that things had recovered somewhat, and even late in the season, wintry weather could keep the slopes open in many locations far longer than skiers are used to seeing. With further efforts to keep expanding its network, Vail is emphasizing the value of smart growth and has demonstrated its commitment to share that growth with shareholders through dividends.
Pay attention to dividends
Making payout increases of 20% or more is a big deal, and these three stocks have made their case for why they deserve a place in dividend investors' portfolios. Vail Resorts, Texas Roadhouse, and Oracle all have work to do to make the most of their business opportunities, but shareholders are optimistic that higher dividend payouts signal future success ahead.
