For investors prioritizing consistent income and long-term capital appreciation, the strategy of identifying companies with strong cash flow capable of sustaining and growing dividends is paramount. This approach stands in contrast to merely chasing the highest available yields, which often carry elevated risks. As July commences, three distinct companies—Watsco, EPR Properties, and Palmer Square Capital BDC—have been identified as fitting this criteria, each demonstrating a commitment to enhancing shareholder returns through their dividend policies.
Watsco: A Decades-Long Dividend Payer in a Recession-Resistant Sector
Watsco (NYSE: WSO), an industrial distributor of heating, ventilation, air conditioning, and refrigeration (HVAC/R) equipment across North America, represents a foundational investment for dividend growth. The company operates within a sector characterized by consistent demand, irrespective of broader economic conditions. As Chairman and CEO Albert Nahmad noted, Watsco’s business benefits from a “decades-long monopoly on the distribution layer of an industry where demand never really goes away.” This inherent stability has enabled Watsco to maintain an impressive track record, having paid dividends for 52 consecutive years.
In February 2026, Watsco’s board underscored its confidence in the company’s prospects by raising the annual dividend by 10% to $13.20 per share, equating to $3.30 per quarter. This increase was directly attributed by Nahmad to the company’s “strong cash flow.” While its forward yield of approximately 3.3% might not immediately capture attention, the underlying consistency and growth rate of its payout are the crucial factors. A 10% raise every few years, as seen with Watsco, compounds significantly over time, offering substantial long-term value to shareholders.
EPR Properties: Monthly Payouts from Experiential Real Estate’s Resurgence
EPR Properties (NYSE: EPR), a real estate investment trust (REIT) specializing in experiential real estate, offers investors a unique blend of high yield and monthly income. Its portfolio encompasses diverse assets such as movie theaters, ski resorts, eat-and-play venues, fitness centers, and various attractions. Following the significant challenges posed by the COVID-19 pandemic to the experiential sector, EPR Properties has demonstrated a robust recovery, proving its portfolio’s resilience and improvement.
The company caters to investors who prefer regular cash flow by distributing dividends on a monthly basis. Effective April 2026, EPR Properties increased its common monthly dividend by 5.1% to $0.31 per share, translating to an annualized rate of $3.72 per share. At recent prices, this represents a yield north of 6%. This dividend hike was supported by strong operational performance, specifically FFOAA (funds from operations as adjusted) and AFFO (adjusted funds from operations) per diluted share growth of approximately 6% year over year. Such underlying growth provides a clear indicator of the company’s financial health, extending beyond the yield figure alone.
Palmer Square Capital BDC: Supplemental Dividends Signal Strengthening Performance
Palmer Square Capital BDC (NYSE: PSBD) distinguishes itself in the business development company (BDC) landscape through its practice of paying supplemental dividends, offering investors an additional layer of income potential. The company primarily focuses on providing senior secured loans to U.S. middle-market companies. This segment, while often receiving less media attention than large-cap borrowers, can present more favorable deal flow and spread opportunities for lenders.
For the second quarter of 2026, Palmer Square declared a base dividend of $0.36 per share, augmented by a $0.03 supplemental dividend payable on July 13, 2026. This marks the second consecutive quarter the company has paid above its base rate, with the Q2 supplemental payment tripling the amount from Q1. While supplemental dividends are contingent on net investment income exceeding the base payout and are not guaranteed, two consecutive payments, particularly with an increased amount, suggest a strengthening performance of the underlying loan portfolio. For income-focused investors seeking potential upside optionality within their dividend structure, PSBD warrants a closer examination.
These three companies—Watsco, EPR Properties, and Palmer Square Capital BDC—represent diverse sectors: industrial distribution, specialized real estate, and middle-market lending. Despite their operational differences, they share a critical commonality: a demonstrated ability to not only sustain but actively grow their payouts to shareholders. This commitment to increasing dividends, backed by robust cash flow and improving operational metrics, positions them as compelling considerations for investors looking to dollar-cost average into durable income streams this July.
