Dividend-paying stocks are a viable investment option for investors seeking passive income. Fortunately, several companies pay dividends. However, as dividend payments depend on a company’s ability to grow its earnings and cash flows, only a few fit the bill for generating worry-free income.   

As dividends stem from profits, investors should target companies capable of expanding their earnings across various market and commodity cycles. Moreover, companies with a proven track record of consistently increasing dividends over the years should be on investors’ radar. Management of such companies is committed to maximizing shareholder returns through higher dividend payouts, making them an attractive investment option for investors seeking passive income.  

Considering these factors, Realty Income Corporation (O), Enterprise Products Partners (EPD), and Altria Group (MO) are three no-brainer stocks for investors seeking worry-free dividend income. These companies have been consistently paying and increasing their dividends for years. Additionally, they have a growing earnings base to support future dividend distributions. Let's delve into the factors that make them top options for earning passive income. 

1. Realty Income Corporation (O)

Real estate investment trust (REIT) Realty Income (O) bills itself as “the monthly dividend company.” Realty Income is also a part of the S&P 500 Dividend Aristocrats ETF (NOBL), which features index components that have consistently raised dividends for 25 or more consecutive years. 

Realty Income distributes a monthly dividend of $0.257 per share, amounting to an annualized sum of $3.084 per share and translating into a yield of 5.8%. Impressively, the company has raised its dividend for 29 consecutive years. 

The firm’s well-diversified and high-quality commercial real estate portfolio and long-term leases enable Realty Income to generate consistent and predictable income, which, in turn, supports its dividend payments. Further, 89% of its total rent is resilient to economic downturns and insulated from e-commerce pressures. 

Realty Income boasts a growing international presence with its portfolio spread across 39 industries, and the average lease term for its international portfolio extends approximately 9.7 years, signifying stability. 

In summary, Realty Income’s growing scale, consistent earnings growth, strong balance sheet, and ability to invest in new growth verticals position it well to enhance shareholders’ value through higher dividend payments.  

Seven out of 18 analysts have a “Strong Buy” rating on this worry-free dividend stock. One analyst recommends a “Moderate Buy,” and 10 analysts maintain a “Hold.” 

The consensus target price of $61.23 reflects a potential 14.4% increase from its current trading price. 

2. Enterprise Products Partners (EPD)

Enterprise Products Partners (EPD) is a leading energy infrastructure company that facilitates the gathering, storage, and transportation of various energy commodities, including natural gas (NGK24) and crude oil (CLM24). The company’s integrated assets and long-term fee-based revenue contracts contribute to its earnings growth in all market and commodity cycles, enabling it to return cash to its shareholders via dividend increases and share buybacks. 

With an impressive track record of 25 consecutive years of dividend growth, Enterprise Products Partners shows its commitment towards rewarding its shareholders. It’s worth noting that its dividend has expanded at an annualized growth rate of 7%, which is encouraging. The company returned $52 billion to its shareholders through dividends and share repurchases during the same period.  

Enterprise Products’ focus on building a resilient midstream energy company and its solid capital projects, scheduled to be operational by 2026, bode well for growth. Also, the strengthening of its debt portfolio is positive, and is likely to drive its future earnings growth and dividend distributions.  

Analysts are largely optimistic about EPD’s prospects, with 13 out of 17 rating the stock as a “Strong Buy.” Two analysts recommend a “Moderate Buy,” and two have a “Hold.” 

The consensus target price of $32.50 reflects about 13% potential upside from EPD's current trading price.  

3. Altria (MO)

Altria (MO) is a prominent tobacco company famous for rewarding its shareholders with higher dividend payouts. It’s worth highlighting that its core tobacco business consistently generates solid earnings to cover payouts. Further, Altria is pivoting towards smoke-free products, which should drive its future revenue, profit, and cash distributions.  

It’s worth highlighting that Altria raised its dividend 58 times in the past 54 years. The company paid $32.2 billion in dividends in the last five years. Further, it offers a high yield of 9.1%.  

Altria expects its earnings to grow by mid-single digits per annum through 2028. Further, Altria’s robust balance sheet, expansion of its U.S. smoke-free operations, and reduction of total debt all bode well for growth. All these positives will enable Altria to increase its dividend at a mid-single-digit rate through 2028.  

Among the analysts covering Altria stock, four recommend a "Strong Buy," five suggest a “Hold,” and two have a “Strong Sell.” 

Altria stock's average price target is $46, implying 7.3% upside potential.