The dividend yields on these stocks are likely to become even more attractive during a market correction.
Dividend stocks have historically delivered higher total returns with less volatility than the overall market, but that doesn’t mean they can’t fall during market selling pressures. While some stocks don’t fall as much as the major indexes, corrections tend to be broad-based.
The good news is that market sales are often an opportunity to pick up some quality stuff. Dividend stocks Even higher Dividend Yield Because they move in the opposite direction to stock prices. Given this situation, it makes sense to have a top list of dividend stocks to buy when the market sells off. Here are three that should be at the top of your list: NextEra Energy (maiden name 1.74%), Brookfield Infrastructure (BIPC 1.00%) (BIP 1.91%)and Enbridge (ENB 0.84%)Significantly increase your income, Total Revenue under selling pressure.
a Powerful Dividend growth stocks
NextEra Energy has delivered impressive dividend growth over the years. A major clean energy-focused company utility The company has grown its dividend at roughly 10% annualized rate for the past 20 years. It has also delivered healthy annualized earnings (9%) and operating cash flow (8%) growth over the past 20 years. These catalysts have fueled market-beating total returns (NextEra over 1,700% vs. ~600% for the S&P 500). S&P 500).
The utility company currently offers an attractive dividend yield of about 2.8%, more than double the dividend yield (1.3%) of the S&P 500. This yield could rise further if the market were to sell off sharply.
NextEra Energy plans to raise its high-yield dividend by about 10% annually through at least 2026. That won’t be hard to achieve: The company has a low payout ratio for a utility (59% versus a peer average of 65%) and plans to grow its adjusted earnings at or near the high end of its annual target range of 6% to 8% per share through at least 2027. Meanwhile, given accelerating demand for renewable energy, it should have plenty of fuel to keep expanding at a healthy pace. future.
Income and rapid growth
Brookfield Infrastructure has done a great job of increasing shareholder value over the years. The global infrastructure giant has grown its cash from operations.FFOThe company has grown its dividends per share at 15% annually and raised its dividend payout at 9% annually since 2009. The company has benefited from strong organic growth drivers as well as acquisitions.
Brookfield currently offers a dividend yield of 4.5%. This high yield is primarily due to Very cheap ratingThe company aims to raise its dividend by 5% to 9% annually over the long term.
The company shouldn’t have a hard time achieving this goal: It expects FFO to grow 6% to 9% annually due to three organic factors (inflation-linked rate increases, higher volumes as the global economy expands, and capital project completions), while the company expects revenue growth from acquisitions to drive growth in excess of 10% annually.
Add that to an already attractive dividend yield, and Brookfield should have the wherewithal to generate strong total returns going forward, with even higher returns likely for those who bought shares during market selling pressures.
High-octane revenue stream
Enbridge also has an impressive track record of dividend growth: The Canadian utility and pipeline company has increased its dividend for 29 years. straight per year. Currently, it’s offering an impressive yield of about 7.5%.
Enbridge may not be. Growing Very early recently. But the company is still growing at a healthy clip: It expects its cash flow per share to grow 3% annually through 2026 and 5% annually thereafter. That cash flow should allow the company to continue raising its dividend.
There are several factors driving this growth forecast. Enbridge has a large pipeline of secured capital projects that it expects to compete on over the next few years. It should also benefit from cost savings from increased scale and rising inflation-linked interest rates. Plus, the company has excess capital capacity to invest in earnings-accelerating acquisitions.
the already Although Enbridge has a high yield, its modest growth rate should help it generate total returns of over 10% per year. Moreover, if selling pressure causes the stock price to fall, returns from that point on could be even higher.
Potential for ultra-high profits
NextEra Energy, Brookfield Infrastructure and Enbridge are already perfectly positioned to generate electricity. Strong Total It offers future returns. It offers a high-yield income stream and a healthy growth profile. However, it may become an even more attractive investment opportunity during market downturns, as the share price could fall and the dividend yield could rise. As a result, it should be at the top of any income investor’s watchlist as a high-quality dividend stock to buy during market downturns.
Matt DiLallo has invested in Brookfield Infrastructure Corporation, Brookfield Infrastructure Partners, Enbridge, and NextEra Energy. The Motley Fool has invested in and recommends Enbridge and NextEra Energy. The Motley Fool recommends Brookfield Infrastructure Partners. The Motley Fool has a disclosure policy.
