Dividend-paying stocks can be highly effective investments. Historically, they have outperformed the market while exhibiting lower volatility. The primary factor behind this outperformance is the growth of dividends.
Brookfield Renewable (NYSE: BEP)(NYSE: BEPC), Oneok (NYSE: OKE), NNN REIT (NYSE: NNN), and Alexandria Real Estate Equities (NYSE: ARE) are notable for their dividend payment capabilities. They provide superior payouts, all boasting yields exceeding 4%, in contrast to the sub-1.5% average of the S&P 500, and consistently increase those payouts. With further dividend growth anticipated, now is a great time to consider purchasing them.
Strong growth expected
Brookfield Infrastructure currently has a yield of approximately 4.4%. The global renewable energy producer has increased its payout at a compound annual growth rate of 6% over the past two decades, anticipating that this trend will persist. It aims for 5% to 9% annual dividend growth moving forward.
The company is already equipped with the necessary resources to support its dividend growth trajectory for the foreseeable future. A mix of inflation-fueled rate hikes, margin expansions, and developmental initiatives are projected to drive 8% to 13% growth in funds from operations (FFO) per share through 2029. This growth outlook is well-defined and largely stabilized. Furthermore, strategic acquisitions will bolster its growth potential and capability to increase its dividends.
Significant capacity for ongoing dividend increases
Oneok also presents a dividend yield near 4.4%. The pipeline giant boasts over 25 years of dividend consistency and growth. While it hasn’t raised its payments annually, it has seen an impressive increase of over 150% in dividends over the last decade compared to its peers.
The company’s current plan is to elevate its dividend by 3% to 4% per year in the next few years, mainly driven by acquisitions. After the transformative acquisition of Magellan Midstream Partners last year, which is expected to add an average of 20% to its free cash flow per share through 2027, the outlook remains strong. Additionally, it recently agreed to acquire Medallion Midstream and a significant stake in EnLink Midstream for $5.9 billion. This transaction will immediately boost its free cash flow, further solidifying its capacity for dividend increases.
An outstanding REIT
NNN REIT boasts a current yield of about 4.8%. This real estate investment trust (REIT) recently achieved a significant dividend milestone, having raised its payment for 35 consecutive years. It stands as one of only three REITs—and fewer than 80 publicly traded companies—that have reached this remarkable achievement.
The REIT consistently pursues accretive acquisitions each year to sustain its growing dividend. It invests in freestanding retail properties that are net leased to expanding national and regional retailers across various sectors, including automotive services, convenience stores, and dining establishments. By fostering strong relationships with its tenants, it secures new acquisition opportunities as they grow. Over 70% of its acquisition volume since 2007 has come from existing relationships. With a robust balance sheet and a reliable tenant base, the REIT is well-positioned to continue expanding its portfolio and shareholder returns.
A robust dividend
Alexandria Real Estate Equities provides a dividend yield around 4.4%. The REIT has consistently raised its payout over time, achieving a 5.4% compound annual rate since 2020. It operates with a low dividend payout ratio of 55% of its FFO, enabling it to retain ample cash for reinvesting in its portfolio growth.
This office-focused REIT primarily invests in life science properties, which are currently experiencing high demand. It has an extensive array of development projects in progress, providing significant visibility into its future earnings potential. Alexandria’s strong balance sheet is reflected in a credit rating that ranks in the top 10% of all publicly listed REITs, granting it the financial capability to continue expanding its portfolio and dividends.
Exceptional dividend growth stocks
Brookfield Renewable, Oneok, NNN REIT, and Alexandria Real Estate Equities all offer dividend yields exceeding 4%. They have excellent track records of rising payouts, and this trend is expected to continue. Now is a great time to confidently invest in these dividend stocks.
Is now the right time to invest $1,000 in Brookfield Renewable Partners?
Before making a purchase in Brookfield Renewable Partners, take this into account:
The Motley Fool Stock Advisor analyst team has identified what they believe are the 10 best stocks for investors to consider right now… and Brookfield Renewable Partners isn’t on the list. The ten stocks that made the cut are expected to generate significant returns in the coming years.
Reflect on how Nvidia was included in this list on April 15, 2005… if you had invested $1,000 at the time of the recommendation, you’d have $716,988!*
Stock Advisor provides investors with a straightforward strategy for success, including portfolio-building advice, regular insights from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of the S&P 500 since its inception in 2002*.
*Stock Advisor returns as of September 30, 2024
Matt DiLallo holds positions in Brookfield Renewable and Brookfield Renewable Partners. The Motley Fool is invested in and recommends Alexandria Real Estate Equities and Brookfield Renewable. The Motley Fool also recommends Brookfield Renewable Partners and Oneok. For more details, please consult the disclosure policy.
4 Top Dividend Stocks Yielding at Least 4% to Invest in Without Hesitation This October was originally published by The Motley Fool