Unlock the Power of Dividend Stocks for Long-Term Success
Brookfield Renewable: A Renewable Energy Powerhouse
Brookfield Renewable stands out as a global leader in the renewable energy sector. Over the past two decades, it has consistently increased its dividend at a remarkable 6% compound annual rate. Currently, it offers a dividend yield of more than 4.5%, which is significantly higher than the S&P 500's dividend, currently near a 20-year low of 1.2%. The company's long-term goal is to increase its payout by 5% to 9% annually, and it has the capacity to achieve this plan. With a staggering 200 gigawatts of projects in various development stages and an operating capacity of 37 GW, Brookfield Renewable is well-positioned for future growth. It expects to commission around 10 GW of capacity annually in the coming years, driven by its development projects. Additionally, the company benefits from rising power prices through inflation-linked rate increases on existing contracts and by locking in higher market prices as legacy agreements expire. Moreover, Brookfield Renewable continues to complete accretive acquisitions, with over $100 billion of new investment opportunities currently under evaluation.This renewable energy giant is set to deliver strong total returns in the coming years. Its combination of high dividend yield and solid growth prospects makes it an attractive investment option for those looking to build a diversified portfolio. By investing in Brookfield Renewable, investors can not only enjoy a steady income stream but also participate in the growth of the renewable energy sector.
The company's focus on sustainable energy sources and its ability to manage and expand its operations make it a leader in the industry. With a clear vision and a strong track record, Brookfield Renewable is poised to continue delivering value to its shareholders in the years to come.
Enbridge: A Stable Energy Infrastructure Company
Enbridge is a renowned Canadian pipeline and utility company that has been increasing its dividend for 29 straight years, growing it at a 10% compound annual rate. Currently, it offers a dividend yield above 6%, providing investors with a generous income stream. Although dividend growth has moderated in recent years, with a 3.1% increase last year, it is expected to trend higher in the future.The company has a staggering 27 billion Canadian dollars ($19.4 billion) of secured capital projects in its backlog, including oil terminal capacity additions, natural gas pipeline projects, gas utility expansions, and renewable energy projects. These projects have in-service dates through 2029, providing Enbridge with significant visibility into its future earnings growth. The company also has meaningful additional funding capacity after paying its dividend and funding its secured projects, giving it the flexibility to sanction additional projects and make bolt-on acquisitions as opportunities arise.
Enbridge expects to grow its earnings before interest, taxes, depreciation, and amortization (EBITDA) by around 7% to 9% annually through 2026, fueled by expansion projects and gas utility acquisitions. Its cash flow per share is expected to rise by around 3% annually during this time frame, although it may be slowed down by some modest headwinds from tax legislation. However, cash flow per share growth is expected to accelerate after 2026, likely growing by around a 5% annual rate, matching its expected medium-term EBITDA growth rate. This should support dividend growth at a similar pace, making Enbridge an attractive investment for those seeking both income and growth.
High Yields and Total Return Potential
Both Brookfield Renewable and Enbridge pay high-yielding dividends that are expected to continue growing. In addition to their attractive dividend yields, these stocks have solid growth prospects. When we combine their yields with their growth rates, they could generate double-digit total returns in the coming years.For investors looking to build a long-term portfolio, these dividend stocks offer the perfect combination of income and growth. By investing in Brookfield Renewable and Enbridge, investors can benefit from the stability and growth potential of these two industry leaders. Whether you are a conservative investor seeking a steady income or a growth-oriented investor looking for long-term capital appreciation, these stocks have something to offer.
With their strong track records, clear growth strategies, and attractive dividend yields, Brookfield Renewable and Enbridge are well-positioned to continue delivering value to their shareholders. As the global economy continues to evolve, these dividend stocks are likely to play an important role in investors' portfolios.
Matt DiLallo has positions in Brookfield Renewable, Brookfield Renewable Partners, and Enbridge. The Motley Fool has positions in and recommends Enbridge. The Motley Fool recommends Brookfield Renewable and Brookfield Renewable Partners. The Motley Fool has a disclosure policy.