Equinix's Rising Cash Flow Positions It as a Next Generation Dividend Aristocrat

Equinix, Inc. (NASDAQ:EQIX) is one of the best next generation dividend aristocrat stocks.

The company may be better known for its real estate investment trust (REIT) operations than for its dividends, but its dividend profile is gaining serious attention. Analysts are increasingly optimistic about the company’s ability to grow its payouts, especially since REITs are often among the most attractive dividend-paying investments.

Since transitioning to a REIT in 2015, Equinix, Inc. (NASDAQ:EQIX) has raised its dividend every year. With demand for data center space accelerating due to ongoing digitalization, the company projects annual revenue growth of 8% to 10% through 2027, reaching around $12 billion. This growth is expected to fuel a 7% to 10% yearly increase in adjusted funds from operations (FFO) per share.

Backed by this rising cash flow and a payout ratio of over 67%, Equinix, Inc. (NASDAQ:EQIX) expects that it can grow its dividend at an annual rate of over 10% in the coming years. The company also expects to pay out $1.8 billion in dividends in 2025.

In the past five years, Equinix, Inc. (NASDAQ:EQIX) has raised its payouts by nearly 12%, and it currently offers a quarterly dividend of $4.69 per share. The stock has a dividend yield of 2.10%, as of June 14.

While we acknowledge the potential of EQIX as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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