Dividend Reward: 3 shares that pay regardless of situation

Companies around the world paid a record $606.1 billion in dividends to their shareholders in the second quarter — 8.2 percent more than the year-ago period. Nearly 90% of dividend-paying companies have either held their payouts flat or increased them over the past year.

These data suggest that now is an excellent time for dividends. However, this is not always the case. Crises and recessions can severely affect some companies’ ability to continue making those payments.

While some companies may at some point be unable to maintain their dividends, Enterprise product partners (EPD 0.75%), Enbridge (ENB 0.59%)and Water of the American States (AWR 1.80%) are models of dividend sustainability. They have continued to distribute those payouts to investors over the years regardless. For that reason, they stand out to several Fool.com contributors as great stocks to buy for those looking for reliable dividend payouts.

Enterprise is ready to pay you (well)

Reuben Gregg Brewer (Enterprise Products Partners): The honest truth is that most investors will likely consider Enterprise Products Partners’ 7.2% distribution yield to be its stock’s main attraction. Given the S&P 500Its current paltry yield of just 1.2% is hardly shocking. But when it comes to creating a passive income stream, there’s a lot more than meets the eye about Enterprise Products Partners.

For starters, there’s its position as one of the largest mid-sized energy businesses in North America. It owns a virtually unduplicated network of energy infrastructure assets — pipelines, storage facilities, processing facilities and more — that generate reliable tax revenue over time. That’s what supports the dividend, and its distributable cash flow covers its distribution 1.7 times. Plus, Enterprise’s balance sheet is investment-grade, so there’s no reason to worry about having to cut back on its distribution. Also notable is that Enterprise is one of the most financially conservative players in its peer group, and has been for years. So what you see today is really what you will get in the long run.

Financial debt to EBITDA (TTM) EPD data by YCharts.

All of this leads to the next big number on the distribution front, which is 26. This is the number of consecutive years the energy company has increased its distribution. If you’re looking for a reliable high-yielding income stock, Enterprise Products Partners should be on your short list.

Proven sustainability of dividends

Matt DiLallo (Enbridge): Enbridge pays one of the most reliable dividends in the energy sector. The Canadian Pipeline and Utilities Company has made dividend payments for more than 69 years and has increased these payments for 29 consecutive years. This streak should continue regardless of market conditions.

The reason for this outlook is the overall sustainability and predictability of Enbridge’s earnings. The company has met its annual financial guidance for 18 consecutive years. That period included two major recessions and two other periods of oil market turbulence. Enbridge has an extremely stable earnings profile, with 98% of its revenue coming from cost of service or contracted assets. It also receives more than 95% of its earnings from investment grade clients. Meanwhile, about 80% of its earnings come from inflation-protected contracts.

Enbridge’s target is to pay out 60% to 70% of its steady earnings in dividends. This allows it to retain a significant percentage of its cash flow to finance expansion projects. The company also has a solid investment grade balance sheet. Its leverage ratio was 4.7 at the end of the second quarter and is on track to fall toward the lower end of its target range of 4.5 to 5.0 by next year as the company takes full advantage of recent utility acquisitions of natural gas.

These offers will help him increase his earnings over several years. In addition, the company has an extensive backlog of capital projects. These support management’s view that it can grow its earnings at an annual rate of around 5% over the medium term.

With a strong financial profile and visible growing growth, Enbridge should have enough fuel to continue raising its dividend, which yields more than 6.5% these days. These characteristics make Enbridge a great option for those looking for a dividend they can the bank on

70 years of dividend increases and counting

Neha Chamaria (Water of the American States): When it comes to dividends, American States Water has accomplished something no other publicly traded US stock has — it has increased its dividend every year for the past 70 consecutive years. That makes American States Water stock the dividend king with the longest active streak of dividend increases. Yes, this is a stock that not only pays you a dividend, but also sends you bigger and bigger checks every year, no matter what.

It doesn’t take much to guess why American States Water has been such a bankable dividend stock. It is a regulated water utility and generates stable and predictable cash flows from its services. It provides water service to more than 1 million people in nine states and also has an electric utility subsidiary. In addition, American States Water’s contracted services arm provides water and wastewater services to 12 US military bases under 50-year contracts and one 15-year contract.

What’s really remarkable about American States Water’s dividend is its rate of growth. It has increased its dividend at a compound annual rate of 8.8% over the past five years and 8% over the past 10. The most recent increase, announced in August, was an increase of 8.3%. That’s solid dividend growth from a utility. With American States Water also targeting payout growth of at least 7% over the long term, this 2.3% dividend yielding stock is the type any income investor would want to own .