Income-Focused Investing: A Formula to Scoop Up Quality Dividend Plays Today

Why Dividend Stocks Deserve Your Attention

Building wealth through dividend-paying equities offers a compelling approach for investors seeking regular cash flow alongside portfolio growth. The most reliable dividend payers demonstrate a consistent ability to sustain and expand their payouts across market cycles. However, not all high-yield opportunities deserve equal attention—understanding the fundamentals behind the payout is equally critical as the yield percentage itself.

A dividend yield that appears unusually attractive often signals underlying weakness rather than opportunity. When a payout ratio climbs too steeply, it may reflect a deteriorating stock price or financial stress at the company level. Conversely, businesses with multi-decade track records of raising distributions typically demonstrate operational strength and disciplined capital allocation.

The winning formula to scoop up dividend stocks involves three core principles: (1) verify the sustainability of current payouts through cash flow analysis, (2) track whether management has consistently increased distributions over time, and (3) ensure the underlying business remains competitive and financially sound.

VICI Properties: A REIT Built for Consistent Income

VICI Properties (NYSE: VICI) represents a textbook example of a well-structured dividend vehicle. As a real estate investment trust specializing in experiential properties, VICI owns and leases premium casino and entertainment destinations rather than operating them. This operational separation creates a stable, predictable revenue stream.

The company’s portfolio spans 93 assets concentrated on the Las Vegas Strip and beyond, featuring legendary properties like Caesars Palace, MGM Grand, and The Venetian Resort. This mix includes 54 gaming facilities and 39 additional experience-focused venues ranging from golf courses to wellness centers. VICI emerged from Caesars Entertainment’s 2017 bankruptcy restructuring, specifically designed to isolate the high-quality real estate assets from operational volatility.

The Income Picture: VICI maintains an annual dividend of approximately $1.80 per share, translating to a robust 6.3% yield. More impressively, the REIT has increased its annual payout for seven consecutive years since its 2018 IPO. As a REIT, the company must distribute substantially all taxable income to shareholders, creating structural incentives for consistent payouts.

The Lease Structure Advantage: VICI employs a triple-net lease model where tenants bear essentially all property-related costs—taxes, insurance, maintenance, and repairs. This transfers expense risk away from VICI while ensuring reliable net rental income. The company currently operates at 100% occupancy across its portfolio.

A critical income protector built into VICI’s lease agreements involves CPI-linked rent escalators. Most long-term contracts include either fixed annual increases or tiered structures with inflation floors (such as 2% minimum) that can scale higher with CPI up to specified caps. These mechanisms safeguard rental income against inflation erosion while maintaining tenant viability.

The weighted-average lease term exceeds 40 years, providing exceptional revenue visibility. Recent results underscore the model’s strength: Q3 2025 revenues reached $1.01 billion (up 4.4% year-over-year), while adjusted funds from operations per share climbed 5.3% to $0.60. The company maintained approximately $508 million in cash and generated roughly $586 million in free cash flow during the quarter.

Bristol Myers Squibb: Pharma Dividends With Growth Potential

Bristol Myers Squibb (NYSE: BMY) exemplifies how established pharmaceutical enterprises can deliver attractive dividends while navigating industry-specific challenges. The company’s current annual dividend stands at $2.52 per share with a yield surpassing 4.6%. Remarkably, Bristol Myers Squibb has maintained an 18-year consecutive streak of increasing its dividend, underlining management’s confidence in long-term profitability.

The company’s pharmaceutical arsenal spans oncology, cardiovascular medicine, and immunology—three of the highest-margin therapeutic areas. This diversification has historically provided earnings stability even as individual blockbusters face patent expiration.

Current and Upcoming Revenue Challenges: Eliquis, a blood thinner co-developed with Pfizer, remains the company’s leading revenue generator but faces patent cliff exposure starting around 2026. Opdivo, a cornerstone cancer immunotherapy with broad applications across multiple tumor types, encounters patent expiration near 2028. These expirations are routine for large pharma companies, which routinely build pipeline strength years in advance to offset anticipated losses.

The Growth Engine: Bristol Myers Squibb has aggressively expanded its newer drug portfolio to backfill revenue gaps. Reblozyl, treating anemia in thalassemia and blood disorder patients, is projected to surpass $2 billion in annual sales. Breyanzi, a cell therapy for large B-cell lymphoma, delivered 60% year-over-year sales growth in the latest quarter. Camzyos, a cardiovascular treatment for obstructive hypertrophic cardiomyopathy, achieved 89% year-over-year growth in Q3.

Additional growth drivers include Cobenfy (oral schizophrenia medication), Sotyktu (psoriasis treatment), Opdualag (melanoma indication), and Abecma (multiple myeloma therapy). The company reported Q3 2025 revenues of $12.2 billion, representing 3% year-over-year growth, while net earnings surged 81% to $2.2 billion.

The Investment Decision: Building Your Dividend Formula

When assembling a dividend-focused portfolio, both VICI Properties and Bristol Myers Squibb represent compelling starting points, though they appeal to different investor preferences. VICI offers real estate stability with 6.3% yield and strong lease protection mechanisms, ideal for those prioritizing current income. Bristol Myers Squibb combines a respectable 4.6% yield with an 18-year dividend growth track record and pharmaceutical innovation driving long-term capital appreciation.

The key is ensuring your dividend formula scoop prioritizes sustainability and alignment with your broader investment objectives rather than chasing yield numbers alone.