3 High-Yield Dividend Stocks You Can Buy and Hold for a Decade
2024-09-22 12:00:00
With the Federal Reserve finally cutting interest rates, it’s the perfect time to add some dividend stocks to your portfolio that have the potential to generate big returns in the coming years.
A dividend yield, however, should never be the only criterion for choosing which dividend stocks to buy. Stocks supporting high yields with steady and growing dividends have the highest potential to rise in the long run and generate big returns for their investors. With that in mind, here are three rock-solid, high-yield dividend stocks you can buy now and hold for a decade.
A bankable big yield for the next decade
The first high-yield dividend stock I find promising is Energy Transfer (NYSE: ET), which yields a hefty 7.9%. Midstream oil and gas companies offer some of the most bankable dividends in the entire energy sector thanks to their contract-based business models. One could argue there are better-known stocks with stronger dividend histories than Energy Transfer to buy.
Energy Transfer stock, however, has generated far bigger returns than its larger counterparts, Enterprise Products Partners and Enbridge, in recent years and could continue to outperform, given its growth and dividend goals.
What has worked for Brookfield Infrastructure so far should continue to work in the future. Specifically, Brookfield Infrastructure owns assets across utilities, transportation, midstream energy, and data infrastructure in the Americas, Europe, and Asia-Pacific regions. Thanks to the essential nature of these assets, 90% of the company’s cash flows are contracted and, therefore, highly predictable and stable.
A large portion of those cash flows is returned to shareholders as dividends. Since 2009, Brookfield Infrastructure has grown its funds from operations by a compound annual growth rate (CAGR) of 15% and its dividend by 9% CAGR.
Brookfield Infrastructure is an intriguing play on some of the biggest global trends, like digitalization and decarbonization. Growth opportunities are aplenty, and the company is confident in growing its annual dividend by 5%-9% in the long term. That pace of dividend growth should support the stock’s yield, making way for potential multibagger returns over the next decade.
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Neha Chamaria has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Enbridge. The Motley Fool recommends Brookfield Infrastructure Partners and Enterprise Products Partners. The Motley Fool has a disclosure policy.
3 High-Yield Dividend Stocks You Can Buy and Hold for a Decade was originally published by The Motley Fool
