Stocks that pay regular and growing dividends can make your money grow manifold and create solid wealth over time. That is why you shouldn't lose any opportunity to double up on promising dividend stocks. Right now, the following three stocks look like particularly enticing buys, with all three boasting impressive dividend track records and targeting steady annual dividend growth.
This stock keeps giving bigger dividends every year
Brookfield Infrastructure(NYSE: BIP) (NYSE: BIPC) is a globally diversified company that acquires and operates infrastructure assets like utilities, railroads, toll roads, energy pipelines, and data infrastructure. Since almost 90% of Brookfield Infrastructure's funds from operations (FFO) are from contracted or regulated sources, it can generate steady cash flows even when the economy is in turmoil. That aside, the company also sells assets as they mature and reinvests the proceeds in new projects. This asset recycling strategy has worked well for Brookfield Infrastructure so far, leaving it with enough cash to not only invest in growth but also increase its dividend every year for the past 15 years.
Brookfield Infrastructure is a no-brainer dividend stock to buy right now. After it grew FFO per unit by 9% in 2023, management projected 2024 to be"an even better year." The company recently reported 11% year-over-year growth in FFO for its first quarter, including organic growth of 7%. It expects to sell assets worth $2 billion this year and is eyeing several acquisitions, including telecom towers in India.
Brookfield Infrastructure has its eyes set on the long term and is targeting at least 10% growth in FFO and 5% to 9% growth in annual dividend while maintaining a payout ratio of 60% to 70%. Whether you buy shares of the partnership yielding 5.5% or corporate shares yielding 4.6% now, Brookfield Infrastructure stock could fetch you some solid returns. There's an advantage of buying shares of the corporation, though -- as an investor in the U.S., you can avoid filing a K1 tax form and foreign tax withholding.
A top-notch Dividend King
American States Water(NYSE: AWR) boasts an unbeatable dividend track record. The water stock has paid a dividend to its shareholders every year since 1931, and has increased it every year for the past 69 consecutive years. That's the longest streak among the Dividend Kings, an elite group of companies that have grown their dividend payouts for at least 50 consecutive years.
Yet, utility stocks are typically boring, and investors often hesitate to buy them as they believe such stocks lack growth drivers and aren't capable of generating big returns. American States Water proves that's not true, and that steady dividend growth can go a long way in boosting a stock's returns. Including dividends, the water stock has more than tripled investors' money in just the past 10 years.
It's never too late to double up on this rock-solid dividend stock. Since it's a regulated utility, American States Water can generate steady and predictable cash flows regardless of how the economy performs. The company also provides contracted water services to military bases under 50-year contracts and recently started operations at two new military bases. Backed by planned investments in infrastructure which should drive its rate base higher, American States Water is confident of growing its dividend by a compound annual growth rate of more than 7% in the long term.
So don't sideline the stock just because it offers a small yield of 2%. American States Water stock's dividend growth alone could translate into big returns for you over time.
A no-brainer dividend stock to buy
Brookfield Renewable(NYSE: BEPC) (NYSE: BEP) stock has delivered solid returns to shareholders over time, with dividends hugely driving those returns. The renewable energy stock has grown its dividend at a compound annual growth rate
of 6% since 2012. The impact of that dividend growth on the stock's returns is here for you to see:
One question you'd want to ask now before buying the stock is whether it can continue to generate big returns in the future. The answer seems to be a resounding yes if Brookfield Renewable's operational performance, growth plans, and financial goals are anything to go by.
After a record 2023, Brookfield Renewable recently reported record FFO for its first quarter and just signed a first-of-its-kind global agreement with tech giant Microsoft to deliver 10.5 gigawatts of new renewable energy capacity in the U.S. and Europe between 2026 and 2030. Growth opportunities are huge, and the company expects to grow its FFO by at least 10% between 2023 and 2028, driven by its humongous development pipeline, margin improvements, inflation escalators, and potential mergers and acquisitions.
That FFO should comfortably support Brookfield Renewable's goal to increase its dividend payout by 5% to 9% annually during the five years. Add a dividend yield of around 5%, and Brookfield Renewable stock could easily generate double-digit annualized returns for investors who buy the stock now for the long term.
Should you invest $1,000 in Brookfield Renewable right now?
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Neha Chamaria has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Brookfield Renewable and Microsoft. The Motley Fool recommends Brookfield Infrastructure Partners and Brookfield Renewable Partners and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
