These companies offer high-yielding dividends that are expected to continue to increase.
Interest rates have been high for two years. While it’s not great For borrowers, this is a great opportunity for those looking for higher yielding investments. Low-risk fixed-income options, such as government bonds and bank certificates of deposit (CDs), are currently yield between 4% and 5%. This can provide investors with nice sources of income.
However, these higher yields are likely won’t last a lot longer. The Federal Reserve appears poised to begin cutting rates later this year, making now a prime time to lock in yield. One of the best opportunities East high yield dividend stocksSeveral companies offer yields above 4%.
In the meantimeUnlike bank bonds and CDs, many from these Payouts are expected to increase in the coming years. This allows their investors to earn increasingly lucrative passive income for life. Four great options to grab right now are Brookfield Renewable Energy (BEPC 1.28%) (BEP 0.66%), Kenvue (KVUE 2.41%), Mid-America Apartment Communities (MAA 1.70%)And Williams (WMB 1.67%).
Generate a lot of income
Brookfield Renewable currently produces a yield of about 5%, several times higher than the S&P 500‘s dividend yield (1.3%). The first renewable energy dividend stocks payment is as sustainable as possible.
The company generates very Brookfield has maintained stable cash flow by selling most of the renewable power it produces to utilities and large companies under long-term contracts. These agreements typically tie electricity rates to inflation. As a result, Brookfield’s stable cash flow is expected to grow by about 2% to 3% annually. At the same time, it expects margin-enhancing activities to boost net income from its existing assets by about 2% to 4% annually.
Brookfield also spends a lot has capitalize on the megatrend of renewable energies. Brookfield Renewable invests in a large and growing pipeline of development projects and consistently makes accretive acquisitions. When combined with its other growth drivers, Brookfield Renewable expects to to grow The company expects to grow its cash flow per share by more than 10% per year through at least 2028 (with even more growth to come). That should give it enough leverage to execute on its plan to increase its dividend by 5% to 9% per year. The company has increased its dividend at a compound annual rate of 6% since 2001.
A healthy dividend legacy
Kenvue currently yields approximately 4.5%. This leading consumer healthcare company generates strong and stable cash flow, driven by enduring demand for its iconic brands, including Listerine, BAND-AID and Tylenol.
The company recently increased its dividend by 2.5%, its first since its inception. spin off from the health giant Johnson & Johnson last year. This continues the legacy left by its former parent company, which increased its dividend for more than 60 consecutive years.
Kenvue is well positioned to continue growing its revenues. It expects growing demand for its traditional products to generate steady organic revenue growth. In the meantime, it is using some of its strong cash flow to invest in developing innovative products and repaying debt (by reducing interest costs). These cash flow growth driversas well as the probability of making profitable acquisitions, should allow Kenvue to follow the example of its former parent company by regularly increasing its dividend.
Strong demand should continue to push this dividend higher
Mid-America Apartment’s dividend yield is over 4%. residential real estate investment trust (REIT) generates steadily increasing cash flow from rental income from its apartment portfolio in the Southeast. The company focuses on growing metropolitan areas, which helps maintain high occupancy and rising rents.
The REIT is also investing to grow its portfolio. It currently has five new multifamily development projects under construction and plans to start four to six more over the next two years. a solid balance sheet gives It provides the financial flexibility to purchase apartment complexes and more land to support future developments.
These factors should allow the REIT to continue increasing its dividend. At the end of last year, it increased its payout by 5%, marking its 14th dividend. right year of dividend growth.
Plenty of fuel to boost your winnings
Williams’ dividend yields 4.5%. The gas pipeline giant generates very a stable cash flow to cover this payment, supported by long-term contracts and government-regulated rate structures. The company has paid dividends every year for 50 years while increasing its payout at an annual rate of 6% since 2018.
The company generates enough cash to cover its high-yield dividend by more than 2x. This allows it to keep some cash to fund expansion projects and make accretive acquisitions. It also has a strong balance sheet to fund new growth investments.
Williams currently has a substantial order book of organic expansion projects under construction, expected to be operational by 2027, and several others in development. This visible order book supports its view that its earnings will grow by 5-7% per year over the long term, who should give There is plenty of fuel to continue increasing its dividend.
These high-yield payments are expected to continue rising
Brookfield Renewable, Kenvue, Mid-America Apartment Communities, and Williams all offer dividends yielding over 4% these days. They also have excellent track records of increasing their dividends, which should continue in the years ahead. For this reason, they seem like great stocks to snap up before the Federal Reserve starts cutting rates.
Matt DiLallo holds positions in Brookfield Renewable, Brookfield Renewable Partners, Johnson & Johnson, Kenvue, and Mid-America Apartment Communities and has the following options: short August 2024 $20 puts on Kenvue. The Motley Fool holds positions in and recommends Brookfield Renewable, Kenvue, and Mid-America Apartment Communities. The Motley Fool recommends Brookfield Renewable Partners and Johnson & Johnson and recommends the following options: long January 2026 $13 calls on Kenvue. The Motley Fool has a disclosure policy.