At first glance drinks giant Diageo(LSE: DGE) may not be the most obvious choice for income investors to put on their shopping list.
Dividend yields at the Guinness and Captain Morgan manufacturer have long fallen short of the averages thrown up by its fellow FTSE 100 constituents, reflecting Diageo's preference on spending surplus cash on huge acquisitions, as well as the impact of some bottom-line strife in recent years.
But despite these pressures, Diageo has remained a steady grower of the dividend and shareholder rewards have grown at a compound annual growth rate of 6.4% during the past five years.
And with economic growth picking up in its core North American marketplace (which is responsible for 37% of group sales) and Diageo ploughing vast sums into product innovation, marketing and roll-out, I believe that dividends should keep on rising reliably, as earnings growth revs higher again.
My bullish take is shared by City analysts, and Diageo is anticipated to enjoy bottom-line rises of 18% and 9% in the years to June 2017 and 2018, respectively. And these forecasts provide the bedrock for dividend estimates of 62.7p per share for this year and 66.4p for 2018, up from 59.2p last year and yielding 2.7% and 2.9%.
Whilst these are not the greatest yields on offer from Britain's blue chips, I reckon investors can sleep safe in the knowledge that dividends at Diageo are not in danger of taking a hammering. I think this peace-of-mind is worth the slight deficit in the yield.
Budget airline easyJet's (LSE: EZJ) progressive dividend policy is on much shakier footing, however, as a blend of rising currency pressures and increasing fuel costs smacks the bottom line. But these travails do not detract the orange-and-white flyer's position as an attractive long-term income stock, in my opinion.
This is despite easyJet having already slashed the dividend, reducing it to 53.8p per share in the period to September 2016 from 55.2p in the previous 12 months. And the Square Mile's band of analysts is anticipating further near-term woe -- a 29% earnings fall predicted for this year is expected to push the dividend to 38.1p.
Still, investors should not lose sight of the subsequent 3.8% yield. And with earnings expected to bounce 16% in fiscal 2018, easyJet is anticipated to get dividends marching skywards again. A 45.2p reward is presently predicted, yielding a brilliant 4.5%.
I reckon easyJet's position amongst Europe's leading low-cost operators leaves it in good stead to generate exceptional profits, and with it dividend, growth as demand for cheap seats continues to take off. Indeed, the Luton-based business moved 5.34m travellers in February, up 8.2% year-on-year.
And while easyJet has dialled back its expansion plans somewhat in the face of current market troubles, the company's bid to boost the number of routes and hubs it operates on the continent should still deliver exceptional shareholder returns in the years ahead.
Royston Wild has no position in any shares mentioned. The Motley Fool UK has recommended Diageo. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.