Best Mid-Cap Dividend Stocks
It’s no secret that many investors have been using dividend-paying stocks, and especially large-cap dividend stocks, to boost the yield of their income portfolios. Because large-cap companies often have a national reputation for quality and reliability, investors believe that investing in them will provide stable and durable returns. However, smaller companies can pay solid dividends too, which is why in this article, we are going to take a look at the best mid-cap stocks with good dividends.
By definition, a mid-cap company has a market capitalization of between $2.0 billion and $10.0 billion. As the name suggests, mid-cap stocks fall in between large-cap stocks and small-cap stocks.
Among the three groups of stocks, large-cap ones are generally believed to be the safest option. This is because large-cap companies are well-established and often have a good reputation with consumers. Some of them have been operating for a long period of time and have proven that they can maintain profitable even during economic downturns. Their perceived lower degree of risk makes large-cap stocks a favorite among investors with high-risk aversion.
Small-cap stocks, on the other hand, could offer a lot more growth potential compared to their large-cap counterparts. This is because small-cap companies are often younger firms that are just entering new market segments, while many large-cap companies already address a significant portion of their target market. Investing in a small-cap company before it becomes an established player in its industry could generate big returns. However, big returns always come with risk. Not every small-cap company is going to become a blue-chip one, and a lot of them don’t have the ability to pay stable dividends. For investors hoping to generate a steady stream of income, focusing on just small-cap names may not be the best strategy.
That’s where mid-cap dividend stocks come in. These companies are more established than the small-cap ones, but could a still offer great growth prospects. Moreover, because they are more established, mid-cap companies are often less risky than small companies, and some of them have the ability to pay stable dividends.
And that’s not all, because mid-cap names are not as well-known as the large-cap ones, they may have less analyst coverage and media visibility. Investors are often willing to pay a premium for the heavily covered blue-chip stocks. So if you are willing to do the research, you might be able to find more value in mid-cap companies with less coverage.
Just like large-cap and small-cap stocks, mid-cap companies can be found in a variety of industries, so investors can diversify within the mid-cap portion of their portfolios. It doesn’t matter which industry you want to get exposure to—consumer staples, retail, banking, real estate, energy, or even defense—chances are you will find plenty of mid-cap companies within that industry.
Now, let’s take a look at the best mid-cap dividend stocks for 2017.
List of Mid-Cap Dividend Stocks for 2017
| Company Name | Stock Symbol | Dividend Yield |
| Aqua America Inc | WTR | 2.51% |
| Omega Healthcare Investors Inc | OHI | 7.96% |
| Commerce Bancshares, Inc. | CBSH | 1.56% |
| EPR Properties Real Estate Trust | EPR | 5.76% |
| Meredith Corporation | MDP | 3.26% |
| Brown & Brown, Inc. | BRO | 1.26% |
| Hill-Rom Holdings, Inc. | HRC | 1.02% |
| Buckeye Partners, L.P. | BPL | 7.35% |
| Graco Inc. | GGG | 1.56% |
| Royal Gold, Inc. | RGLD | 1.55% |
1. Aqua America Inc
Aqua America Inc (NYSE:WTR) is a water and wastewater utility company that serves approximately three-million people in eight states in the U.S. Headquartered in Bryn Mawr, Pennsylvania, the company has been operating for 130 years and is still growing.
Many investors may not have heard of this company, but Aqua America represents a unique opportunity. This is because the U.S. water industry is highly fragmented with a small private sector. The high barriers to entry have given companies like Aqua America monopoly status in the markets they operate in.
Aqua America is one of the “dividend aristocrats,” a title awarded to companies that have raised their dividends for at least 25 years. The company has paid consecutive quarterly dividends for 72 years and has raised its payout 26 times in the past 25 years. Right now, WTR stock is yielding 2.51%.
2. Omega Healthcare Investors Inc
Omega Healthcare Investors Inc (NYSE:OHI) is a real estate investment trust (REIT) that invests in and provides financing to the long-term care industry. Its current portfolio includes approximately 1,000 properties located in 42 states and the U.K., operated by 81 different operators.
One of the goals of this REIT is to provide consistently increasing returns to its investors, and it has done a good job achieving that goal. From 2005 to 2010, Omega was the number-one health care REIT for total shareholder return and number three among all REITs.
With a 7.96% dividend yield, Omega is one of the highest-dividend-paying mid-cap stocks. Other than the high dividend yield, the company also has an impressive track record of raising its payout. In fact, Omega has been raising its dividend rate for 18 consecutive quarters.
3. Commerce Bancshares, Inc.
Commerce Bancshares, Inc. (NASDAQ:CBSH) is a regional bank holding company. It provides a wide range of financial products to consumers and commercial customers, including personal banking, lending, mortgage banking, wealth management, brokerage, and capital markets services. Headquartered in Kansas City, Missouri, Commerce Bank has more than 350 locations across Missouri, Kansas, Illinois, Oklahoma, and Colorado.
Even though Commerce Bank is not a blue-chip name, its track record of dividends is nothing to sneeze at. The company has raised its dividend payout in each of the past 49 years, making it very close to becoming a “dividend king.”
Commerce Bancshares is currently yielding 1.56%.
4. EPR Properties Real Estate Trust
EPR Properties Real Estate Trust (NYSE:EPR) is a bit different from most REITs in that it offers the benefits of both a specialized REIT and a diversified REIT. It is a specialized REIT that diversified across and within segments. EPR’s three main segments are Entertainment, Recreation, and Education, which right now account for 98% of the company’s total operating income. (Source: “Investment Profile,” EPR Properties Real Estate Trust, last accessed March 9, 2017.)
One thing that makes EPR stands out is that the company pays monthly dividends, which is great for investors that want their portfolio to generate an income stream to cover monthly expenses. With a monthly dividend rate of $0.34 per share, EPR has an annual yield of 5.76%
EPR has raised its annual payout by 47% since 2010, making it one of the best mid-cap dividend growth stocks. Going forward, the company expects to generate adjusted funds from operations of $5.05 to $5.20 per share in 2017, which would represent a 6.3% year-over-year increase at the midpoint. There’s a good chance that EPR will raise its dividend sometime later this year.
5. Meredith Corporation
Meredith Corporation (NYSE:MDP) is a media conglomerate that has been operating for over 100 years. The company operates through two main segments, Local Media Group and National Media Group. Its Local Media Group has 17 television stations reaching 11% of U.S. households, while its National Media Group includes magazines that reach 100-million women every month. Thanks to sizable political ad spending in the recent U.S. presidential election, the company delivered record results in the most recent quarter.
Meredith has been paying uninterrupted dividends for 70 consecutive years. It has also raised its payout for 24 years straight, making it almost a dividend aristocrat.
The latest dividend hike came this January, when the company raised its annual payout by 5.1% to $2.08 per share. At today’s price, Meredith has an annual dividend yield of 3.26%.
6. Brown & Brown, Inc.
Brown & Brown, Inc. (NYSE:BRO) is an independent insurance brokerage. The company provides a variety of insurance products and services to corporate, public entity, institutional, trade, professional, association, and individual clients.
What makes Brown & Brown stands out is its track record of increasing dividends. Since 1993, the company has raised its dividend every single year. It’s not a dividend aristocrat yet, but is on its way to get that title.
The insurance brokerage has been growing its business. In 2016, Brown & Brown’s revenue grew 6.4% to $1.77 billion. Net income came in at $257.5 million, an increase of 5.7% from the prior year. (Source: “Brown & Brown, Inc. Announces Quarterly Revenues of $433.6 Million, an Increase of 7.1%; and Earnings per Share of $0.41,” Brown & Brown, Inc., January 23, 2017.)
BRO stock is currently yielding 1.26%.
7. Hill-Rom Holdings, Inc.
Hill-Rom Holdings, Inc. (NYSE:HRC) is a medical technology company providing a wide variety of products and services, such as medical surgical beds, intensive care unit beds, healthcare furniture, and medical equipment management services. The company operates through five core segments: Advancing Mobility, Wound Care and Prevention, Clinical Workflow, Surgical Safety and Efficiency, and Respiratory Health. Hill-Rom currently has over 10,000 employees and has partnered with health care providers in more than 100 countries.
Hill-Rom has a rather impressive dividend history, having paid consecutive quarterly dividends since 1972. In the past five years, the company’s quarterly dividend rate has increased 55%.
Hill-Rom stock is currently yielding 1.02%.
8. Buckeye Partners, L.P.
With a market cap of $9.6 billion, Buckeye Partners, L.P. (NYSE:BPL) is still a mid-cap stock. But the reason to invest in this master limited partnership could be different from investing in other mid-cap companies.
You see, even though Buckeye is a mid-cap stock, the partnership is well established in the industry it operates in. It is one of the largest independent petroleum products pipeline operators in the U.S., with approximately 6,000 miles of pipeline. Buckeye also owns a terminal network with aggregate storage capacity of over 115-million barrels.
The number-one reason to invest in Buckeye is to collect its handsome distributions. Paying $1.2375 per unit each quarter, the partnership is yielding a very impressive 7.35%. Since Buckeye’s initial public offering in 1986, the partnership has never missed a dividend payment.
9. Graco Inc.
Graco Inc. (NYSE:GGG) is a manufacturer of fluid handling systems and products. Headquartered in Minneapolis, Minnesota, the company designs, manufactures and promotes/sells items used to move, control, spray, measure, and dispense powder and fluid materials. Graco’s customers typically come from manufacturing, processing, construction, and maintenance industries.
Graco currently pays $0.36 of dividends per share on a quarterly basis, translating to an annual yield of 1.56%. In the past three years, the company’s quarterly dividend rate has increased more than 30%. (Source: “Graco Announces Regular Quarterly dividend,” Graco Inc., February 17, 2017.)
10. Royal Gold, Inc.
Precious metals can serve as a hedge against inflation and political uncertainty. For centuries, they have helped investors preserve their wealth. While I’m optimistic about where the world economy is going, having some exposure to precious metals might not be a bad idea.
That’s why my final pick for the mid-cap dividend stocks list is Royal Gold, Inc. (NASDAQ:RGLD). Royal Gold does not mine precious metals itself; rather, it is a precious metals royalty and stream company engaged in the management and acquisition precious metal streams, royalties, and other, similar interests in regards to production. Royal Gold currently owns interests on 193 properties on six continents, including interests on 38 producing mines and 22 development stage projects.
Paying $0.24 per share on a quarterly basis, Royal Gold has an annual dividend yield of 1.55%.