My portfolio is chock-full of dividend stocks. Many of them offer high yields. By the way, I consider a yield as high if it’s more than two times greater than the yield of the S&P 500 (SNPINDEX: ^GSPC). This approach works better for me than going with a fixed percentage.
What are my top high-yield dividend stocks to buy now? Here’s why Enbridge (NYSE: ENB), Enterprise Products Partners (NYSE: EPD), and Verizon Communications (NYSE: VZ) stand out.
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1. Enbridge
Enbridge pays a forward dividend yield of 4.9%, almost five times higher than the S&P 500’s yield. In addition to this juicy yield, the company has increased its dividend for an impressive 31 consecutive years. Its distributable cash flow payout ratio of between 60% and 70% is also healthy.
Great dividends are the byproduct of great underlying businesses. Enbridge is a leader in the midstream energy industry. It operates the world’s oil and liquids pipeline network, serving more than 75% of North American refineries. The company’s pipelines also transport around 20% of all natural gas consumed in North America.
But Enbridge isn’t only a pipeline stock. It ranks as the largest natural gas utility in North America by volume. The company has also expanded its renewable energy operations and now provides renewable power to top customers, including AT&T (NYSE: T), Meta Platforms (NASDAQ: META), and Toyota (NYSE: TM).
Enbridge has clear visibility into growth through the end of the decade. North American liquid natural gas (LNG) demand is expected to increase to over 30 billion cubic feet per day by 2030, while gas demand is projected to increase to roughly 28 billion cubic feet per day. Management has identified around $50 billion of growth opportunities over the next four years to meet this rising demand.
2. Enterprise Products Partners
Enterprise Products Partners offers an even higher distribution yield of 5.6%. The limited partnership (LP) has increased its distribution for 27 consecutive years. It appears to be in great shape to keep the streak going, with a payout ratio of 57% based on adjusted cash flow from operations.
Like Enbridge, Enterprise Products Partners is a key player in the North American midstream energy market. It operates over 50,000 miles of pipeline that transport natural gas liquids (NGLs), crude oil, natural gas, petrochemicals, and other refined products.
