Costco (COST)

In an era where physical stores are under serious threat from online merchants, Costco remains a brick-and-mortar beast.

Over the past five years, Costco shares have surged more than 230%. And while many growth stocks are experiencing sharp declines in 2022, Costco is basically flat year to date.

The membership-only big-box store operator is known for selling numerous consumer staples products at low prices. When people become more budget-conscious as a result of inflation, the warehouse retailer’s value proposition is tough to ignore.

With a dividend yield of just 0.6%, Costco may not get the attention of most income investors. But its payout has been consistently on the rise. Since the company started paying quarterly dividends in 2004, management has raised the payout every single year.

Costco’s last dividend hike was announced in April 2021. Given how well the company’s business has been doing, another payout increase should be right around the corner.

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Johnson & Johnson (JNJ)

With deeply entrenched positions in consumer health, pharmaceuticals and medical devices markets, healthcare giant Johnson & Johnson has delivered consistent returns to investors through thick and thin.

Not only does Johnson & Johnson post recurring annual profits, but it also grows them consistently: Over the past 20 years, Johnson & Johnson’s adjusted earnings have increased at an average annual rate of 8%.

The stock has been trending up for decades. And it is demonstrating its resilience again in 2022: While the broad market has declined, JNJ is up 2% year to date.

The best part: Shareholders can look forward to higher dividends every year.

Johnson & Johnson announced its 59th consecutive annual dividend increase last April. It should have no problem continuing that track record — meaning another hike should be made official next month. JNJ currently yields 2.4%.

Hess Midstream (HESM)

Investors looking to earn oversized dividends in today’s market should take a look at midstream energy companies. (Businesses that process, store and transport oil and natural gas.)

Hess Midstream, for instance, currently pays a quarterly distribution of 51.67 cents per share, giving the stock a generous annual yield of 6.6%.

But here’s the most impressive part: While most companies would be proud to offer annual dividend increases, Hess Midstream has been raising its cash payout on a quarterly basis since its IPO in 2017.

In the latest earnings conference call, CFO Jonathan Stein said that the company is targeting 5% annual distribution per share growth through at least 2024.

Management is confident about those distributions, too.

“Highlighting our financial strength, we expect distribution coverage greater than 1.5x and excess adjusted free cash flow of approximately $90 million after fully funding our targeted growing distribution [in 2022],” Stein said.

All things considered, Hess Midstream’s next distribution announcement — which should come in late April — will likely be an increase.

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