NEW YORK (TheStreet) -- The rising stock market has made it increasingly difficult to find businesses with high yields and a long history of dividend growth. That's because low interest rates have pushed up prices on real assets such as stocks and bonds, reducing yields. So, it is difficult to find these stocks in this market, but not impossible.
There are three businesses that have yields of more than 5% and have increased their dividend payments for 25 (or more) consecutive years. I found these three unique names by combing through the Dividend Aristocrats Index, which is comprised of businesses that have 25 or more years of consecutive dividend increases.
- AT&T (T - Get Report): 5.31% yield, 30 consecutive years of dividend increases;
- Universal Health Trust (UHT - Get Report): 5.84% yield, 27 consecutive years of dividend increases;
- HCP (HCP - Get Report): 5.32% yield, 29 consecutive years of dividend increases.
AT&T: Dividend Growth Catalysts
Here's a look at the growth catalysts for each business, so you can see from where future dividend growth will come.
AT&T provides telecommunications services to consumers and businesses primarily in the U.S. The company's revenues are divided between its Wireline Voice, Wireline Data & IT Solutions, and Wireless divisions. The company's wireless division accounts for 55% of revenue, according to its second-quarter investor briefing.
A REIT spinoff would be accretive for shareholders by allowing AT&T to focus entirely on customer service and retention, customer acquisitions and intellectual property. The REIT spinoff would be able to tap equity markets through share issuances more efficiently and be focused solely on building better telecommunications networks. Universal Health and HCP Dividend Growth Catalysts Both Universal Health Trust and HCP are health care REITs. Universal Health Trust was founded in 1986, and now has 56 investments in 16 American states. The majority of Universal Health Trust's income comes from medical office buildings and clinics. HCP also invests primarily in U.S. health care properties. The company's assets are spread between senior housing, post-acute/skilled nursing, life science, medical offices and hospitals, according to Universal Health Trust Investor Relations. Both businesses are experiencing strong macroeconomic tailwinds due to their exposure to the health care industry. The health care industry has been growing significantly faster than the overall U.S. economy for the last five decades, according to The Incidental Economist.
Rapid health care expansion is a result of several broad trends that are likely to persist far into the future. The first of which is a growing number of elderly people in the U.S. As the "baby boomer" generation retires, the level of elderly people in need of health care will continue to rise. Technological advances have greatly increased high-end spending on health care, as sites by the Congressional Budget Office. Read More: Look to Dividend Aristocrat Stocks, not Annuities, for Retirement Income