Three Inevitable High-Return Dividend Shares to Invest in by 2025
Investing in high-yield dividend stocks can be a smart move for those seeking a steady income stream. These types of stocks provide investors with a solid base return through dividend income, and they don't necessarily need to grow at a rapid pace to offer an attractive total return. They tend to be less volatile investments as well.
Three stocks that stand out as potential high-yield dividend buys for 2025 and beyond are Black Hills, Brookfield Renewable, and Brookfield Infrastructure. Here's why these companies might be worth considering:
Black Hills: A Dividend King
Reuben Gregg Brewer points out that Black Hills is offering investors a 4.5% dividend yield, which is well above the average utility's yield and also sits near the high end of the electric and gas utility's historical yield range over the last decade. Additionally, Black Hills has an investment-grade rated balance sheet and a capital investment plan of $4.3 billion over the next five years. The dividend is likely to grow in line with the utility's earnings over time, making it a reliable and high-yield option.
Brookfield Renewable: Growth and Income
Matt DiLallo highlights that Brookfield Renewable generates cash flow by selling renewable power to utilities and large corporate buyers under long-term, fixed-rate power purchase agreements (PPAs). This gives it the cash to pay a lucrative dividend, which is several times higher than the S&P 500's yield. Brookfield has grown its payout at a 6% compound annual rate over the last 20 years and has an enormous backlog of renewable energy projects in the pipeline. The company expects to grow its FFO per share by more than 10% annually for the next several years, which could enable it to produce powerful total returns.
Brookfield Infrastructure: A Solid Combination
Neha Chamaria shares that Brookfield Infrastructure is one of the world's largest owners and operators of infrastructure assets, with a growing backlog and a wide range of businesses, including utilities, transport, midstream energy, and data infrastructure. The company has grown its FFO per unit by 7% in the nine months that ended in September 2024 and continues to invest in infrastructure projects. With a dividend track record of raising its dividend every year since 2009 and growing it by a compound annual growth rate of 9% through 2024, Brookfield Infrastructure is a strong option for income-focused investors.
Incorporating enrichment data, Black Hills' dividend yield is higher than average and it has achieved Dividend King status, thanks to its 54-year history of annual dividend increases. Brookfield Renewable has grown its payout at a 6% compound annual rate over the last 20 years, while Brookfield Infrastructure has grown its FFO per unit by 7% during the nine months that ended in September 2024. All three companies are attractive high-yield dividend stocks due to their consistent dividend growth histories, strong operational performance, and strategic investments.
Investing in Black Hills, Brookfield Renewable, and Brookfield Infrastructure can be a strategic move for those looking to boost their finance portfolio. Black Hills' high dividend yield of 4.5% makes it an appealing option for income-focused investors, while its investment-grade rated balance sheet and extensive capital investment plan ensure a reliable dividend growth.