Two Strong Dividend Stocks Worth Considering Now

As the stock market experiences fluctuations, now is a great time to focus on dividend stocks that can provide a stable income. These reliable stocks, with yields of up to 6.3%, should definitely be on your radar as you build your investment portfolio.

Dividend stocks are not only favorable for income-driven investors but are valuable for anyone looking to enhance their investment strategy. These stocks provide a consistent income stream, particularly during unpredictable market conditions. Not only can they deliver steady dividends, but stocks with regular dividend growth often turn out to be significant long-term winners. Here, we explore two dividend stocks that stand out right now.

Potential for Over 9% Annual Returns with This Dividend Stock

Brookfield Infrastructure (BIPC -1.83%) (BIP -2.21%) operates on the New York Stock Exchange, offering both partnership units and corporate shares. While both options refer to the same company, investors seeking simpler tax reporting should opt for the corporate shares.

But why should you consider investing in Brookfield Infrastructure? To summarize: its solid asset base, strong business model, and consistent dividend growth make it a prime candidate for inclusion in your portfolio. As of now, the corporate shares yield 4.7%, while the partnership units are at 5.7%. With the stock down nearly 15% over the last six months, this is an excellent opportunity to increase your investment.

Brookfield Infrastructure manages a wide range of regulated assets, including utilities, natural gas pipelines, railroads, toll roads, data centers, and fiber-optic networks. The company enjoys a stable cash flow, with 85% of its free cash flows being regulated or contracted. This ensures that revenue continues even in economic downturns. The company also follows a smart strategy of selling mature assets to reinvest in higher-margin opportunities, effectively maintaining a cycle of growth.

The firm has shown impressive growth, with its funds from operations (FFO) per unit increasing at a compound annual rate of 15% and its dividend per unit growing by 9% since 2009. Notably, the corporate stock, which became listed in 2021, has doubled investor returns when dividends are reinvested.

In the long run, Brookfield Infrastructure is aiming for over 10% FFO per unit growth and an annual dividend growth of 5% to 9%. When combined with the dividend yield, this projects potential annualized returns of at least 9%, making it a very sound option for income-focused investors.

This High-Yield Stock Could Offer Even Larger Dividends

Enterprise Products Partners (EPD 0.46%) has established a strong reputation in the dividend stock arena, having increased its dividend for over 25 consecutive years. This continual dividend growth has significantly boosted returns for investors. In fact, over the past five years, those who have reinvested dividends in Enterprise Products have earned more than 250% in returns. Currently, there are several reasons to be particularly optimistic about this stock.

Enterprise Products operates as a midstream energy company, boasting a vast pipeline network that transports natural gas, crude oil, natural gas liquids, petrochemicals, and refined products. The company has heavily invested in recent expansions, and many of these major projects are nearing completion. Specifically, out of $7.6 billion in key projects underway, $6 billion are expected to be operational this year, including gas processing plants in the Permian Basin and lines for expanded natural gas liquids transport.

Cash flows from these projects should begin benefitting Enterprise Products later this year. Additionally, with capital expenditures expected to decrease from $4 billion-$4.5 billion in 2025 to $2 billion-$2.5 billion in 2026, this will likely lead to more cash available for dividends and share buybacks. With the stock currently yielding 6.3%, now would be a wise time to consider bolstering your position in this promising dividend stock.

No position is held by the author in any of the mentioned stocks.

dividends, investing, stocks