These impressive dividend growth stocks are definitely worth considering right now.
Dividend stocks can provide a steady stream of passive income and have a solid track record of building wealth, particularly when you focus on prime dividend growth stocks and reinvest those dividends. This approach could lead to substantial returns over time, thanks to the magic of compound interest.
While I prioritize dividend stability and yield, I’ve come across 10 fantastic dividend stocks you might want to buy. What’s interesting is that some of these options offer a rare mix of both growth and high yields.
1. Real Estate Income: 5.6% Yield
Real Estate Income is unique on this list as it pays its dividends monthly. This real estate investment trust (REIT) has been paying out dividends since 1994 and has significantly increased its payment—by 130 times, in fact. The company’s diversified portfolio includes over 15,000 properties, generating rent through long-term triple net leases. This diversity helps protect it from economic downturns, while the leasing structure keeps costs low. Despite its strong position, its stock is currently 30% below its peak.
2. Nextera Energy: 3.2% Yield
Nextera Energy is the largest utility in the U.S. and leads in both wind and solar energy production. It combines reliable cash flow from traditional utilities with growth from renewable sources. Having paid regular dividends since 1991, it has increased them annually for over two decades. The company has almost 300 gigawatts in its renewable energy pipeline and expects to see adjusted revenue growth of 6% to 8%, along with a dividend growth rate of at least 10% through 2026.
3. Enterprise Product Partners: 6.9% Yield
Enterprise Product Partners stands out as one of the most reputable oil and gas dividend stocks. With long-term, fee-based contracts in place, the company generates consistent cash flow while also engaging in substantial growth investments. This year alone, it has $6 billion worth of projects planned. The stock has raised dividends for 26 consecutive years, currently yielding a high 6.9%, making it a standout choice.
4. Brookfield Infrastructure: 4.2% Yield
Brookfield Infrastructure controls significant assets including energy utilities, railways, and toll roads, most of which are either regulated or contracted to ensure stable cash flows throughout economic cycles. This company has boosted its dividend every year since 2009, achieving a CAGR of about 14%. With projected increases in funds from operations, driven by global trends like digitalization, it aims for annual dividend growth of 5% to 9%, presenting a solid buy opportunity.
5. American Water: 2.4% Yield
American Water is the largest regulated water and wastewater utility in the U.S., servicing around 14 million customers along with several military bases. It is considered a low-risk investment with substantial long-term rewards. With plans to spend $40-$42 billion on infrastructure over the next ten years, it expects stable earnings growth of 7% to 9%, so its dividends should align well with that growth—definitely worth a look for steady income.
6. Waste Management: 1.5% Yield
Waste Management is North America’s leading waste management provider, notable for its recession-resistant revenue. Recently, it made headlines by acquiring Stericycle, aiming for significant cost synergies. With 22 consecutive years of dividend increases and a growth rate of 7.4% over the last three years, Waste Management continues to show impressive long-term potential.
7. Brookfield Renewable: 4.6% Yield
The International Energy Agency forecasts a 90% increase in global renewable energy generation from now until 2030. Brookfield Renewable, with its expansive and diverse asset portfolio spanning hydropower to solar, is well-positioned to capitalize on this trend. With 90% of its cash flow contracted, stable dividends are expected, and the company anticipates growth of over 10% in funds from operations.
8. Caterpillar: 1.6% Yield
Caterpillar operates in cyclical industries, but its strong dividend history demonstrates its brand’s resilience. It leads the market in construction and mining equipment, and its management is committed to returning most free cash flow to shareholders. Despite some investor concerns about future revenue, the company recently announced a 7% dividend increase, marking its 31st consecutive year of such hikes—solidifying its place in a balanced portfolio.
9. Emerson Electric: 1.6% Yield
Emerson Electric is noteworthy as a Dividend King, having raised its dividend payments for 69 years. This automation company excels across major sectors like energy and healthcare, demonstrating impressive operational efficiency. With strong free cash flow growth and promising prospects in automation, Emerson appears to be a reliable long-term investment.
10. Parker Hannifin: 1% Yield
Parker Hannifin is often overlooked yet has been increasing its dividends for 69 consecutive years. Specializing in control equipment for large industries such as aerospace and defense, it shows strong potential with a sizable market waiting to be tapped. With steady revenue growth and solid free cash flow margins, Parker Hannifin seems to be on a promising trajectory for dividend expansion.
