Top High-Yield Stocks You Should Consider Investing Now
Volatility in the stock market can create opportunities for investors to lock in high yields on quality dividend stocks. By focusing on stocks with strong fundamentals and attractive dividends, investors can enhance their portfolio returns over time. In this article, we’ll explore three high-yield dividend stocks—Dominion Energy, Chevron, and Brookfield Renewable—that are currently offering attractive yields. Let’s dive into why these stocks are worth considering for your investment portfolio.
Dominion Energy: Strengthening Core Operations
Dominion Energy (NYSE: D) is a major player in the financial services sector, operating as a large regulated utility with over 4.5 million customers across 13 states. Dominion has undergone a significant transformation over the past few decades, simplifying its business model by divesting non-core assets such as oil drilling and midstream pipeline operations. This strategic shift has positioned Dominion as a lower-risk investment, appealing to those focused on investment management and long-term stability.
The company’s ongoing transition hasn’t been without challenges. The sale of its pipeline business to Berkshire Hathaway led to a dividend cut, and subsequent promises of dividend growth were not fulfilled as Dominion focused on further asset sales. However, with the recent sale of three natural gas utilities to Enbridge, Dominion is now positioned to strengthen its balance sheet and invest in its core electric utility operations. Management expects earnings to grow between 5% and 7% annually through 2029, which should eventually allow for a more normal payout ratio and renewed dividend growth.
Currently, Dominion Energy’s dividend yield stands at an impressive 5%, compared to the average utility yield of 3.2%. This makes it an attractive option for investors seeking steady income in the financial services sector. While the turnaround may take time, investors are being paid well to wait, and the potential for dividend growth in the future could lead to a higher valuation for Dominion.
Chevron: A Resilient Energy Giant
Chevron (NYSE: CVX) has seen its shares drop more than 15% from their 52-week high, driven by lower oil prices and delays in closing its acquisition of Hess. Despite these challenges, Chevron’s dividend yield has climbed to 4.5%, significantly higher than the S&P 500’s average yield of around 1.5%. This makes Chevron an attractive option for those focused on investment planning and seeking high-yield opportunities in the energy sector.
Chevron has continued to deliver strong operational results, with global production rising 11% in the second quarter, driven by its acquisition of PDC Energy and growth in the Permian and DJ Basins. The company generated $4.7 billion in adjusted earnings and $6.3 billion in cash flow from operations during this period. These strong financials enable Chevron to return significant capital to shareholders, with $3 billion paid in dividends and $3 billion in share repurchases in the second quarter alone.
Chevron’s strong cash flow and balance sheet position it to grow its free cash flow by more than 10% annually through 2027, assuming oil prices average around $60 per barrel. This growth potential could fuel further dividend increases, building on Chevron’s 35-year history of annual dividend growth. With upside potential from higher oil prices and the successful completion of the Hess acquisition, Chevron’s stock presents a compelling opportunity for investors seeking high yields and long-term growth in the investment landscape.
Brookfield Renewable: A Leader in Green Energy
Brookfield Renewable (NYSE: BEPC)(NYSE: BEP) is a prominent player in the renewable energy sector, offering a dividend yield of 5.8%. Despite the stock’s underperformance relative to the S&P 500, Brookfield Renewable continues to be a solid choice for investors looking to capitalize on the growing demand for clean energy. The stock is currently down about 7% for the year, providing an attractive entry point for long-term investors.
Brookfield Renewable is one of the world’s largest pure plays in renewable energy, with a strong track record of growing its funds from operations (FFO). Between 2016 and 2023, the company grew its FFO per unit at a compound annual growth rate (CAGR) of 12%, and it is targeting at least 10% annual growth through 2028. This growth is expected to be driven by its robust development pipeline, potential margin improvements, and merger and acquisition opportunities.
Brookfield Renewable’s commitment to rewarding shareholders is evident in its consistent dividend growth. The company has increased its dividends steadily since 2001, achieving a CAGR of 6%, and it aims for 5% to 9% annual dividend growth in the long term. With its strong dividend yield and growth potential, Brookfield Renewable is a high-quality dividend stock worth considering for those interested in investment banking and sustainable energy investments.
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