Title: Two High-Yield Dividend Stocks Worth Investing in this December
Investing in dividend stocks is my preferred strategy, and none come closer to my favorites than Brookfield Infrastructure (BIPC) and Enbridge (ENB). Both of these companies offer high-yielding dividends that consistently increase over time, along with robust growth prospects.
Starting with Brookfield Infrastructure, this global infrastructure operator has been on a roll for 15 years, increasing its dividend every year. With a near 4% yield, it offers investors a significant boost over the S&P 500's 1.2% yield. Brookfield generates a stable cash flow done in large part through contracted and regulated earnings, with around 90% and 70% being protected against volume or price changes, respectively. Thanks to its strong balance sheet and financial discipline, the company is ready to continue growing its FFO at an annual rate of over 10%.
With growth potential like this, it's no wonder Brookfield expects to increase its dividend by 5% to 9% annually. This rock-solid growth profile, combined with its generous dividend yields, makes Brookfield Infrastructure a highly attractive investment prospect.
Next, we turn to Enbridge, the Canadian pipeline and utility operator that boasts a 30-year streak of annual dividend increases. Enbridge's dividend yield is an impressive 6%, more than twice as high as the S&P 500's.
Along with its high yield, Enbridge has a virtually unmatched low-risk business model. Over 98% of its earnings come from assets with stable or contracted revenue, while 80% are even protected against inflation. Enbridge's business is so predictable that they are on track to hit their annual financial goals for the 19th year in a row.
With a combination of organic growth and accretive acquisitions, Enbridge expects to boost its cash flow per share at a 3% annual rate through 2026 and at a 5% yearly clip thereafter. This growth will allow Enbridge to continue increasing its dividend at a similar rate.
In a nutshell, both Brookfield Infrastructure and Enbridge offer high yields and impressive long-term growth prospects. By combining these dividend powerhouses with their low risk profiles, you can earn double-digit total returns in the coming years.
Enrichment Data:
Brookfield Infrastructure
Long-term Growth Prospects:Brookfield Infrastructure Partners (BIP) has a strong long-term growth potential due to its diversified asset base, strategic acquisitions, and capital recycling strategy. The company is well-positioned for future growth, with FFO per share growing at a 15% CAGR from 2009 to 2023. Brookfield has an impressive capital backlog of $8 billion, plus a shadow backlog of $4 billion for growth opportunities, mainly in data centers, AI-driven demand for power infrastructure, and decarbonization initiatives[3].
Dividend Yield:Brookfield Infrastructure offers a 5.2% distribution yield, backed by robust cash flows from essential assets and geographically balanced revenue streams[3].
Enbridge
Long-term Growth Prospects:Enbridge's robust capital-allocation framework is expected to lead to EBITDA growth of at least 7% through 2026. The company plans to spend $8 billion per year on low-capital intensity expansions, modernization, and utilities rate base investments[2]. Analysts predict enhanced earnings growth, with ENB's adjusted earnings expected to reach $3.2 per share by 2026, up from $2.78 in 2024[2].
Dividend Yield:Enbridge provides a highly competitive forward dividend yield of 6.3%. Over the last 29 years, Enbridge has steadily increased its dividends by 10% annually[2]. The company pays an annual dividend of CA$3.77 per share, with the next payment date scheduled for March 1, 2025[4].
Summary
Brookfield Infrastructure and Enbridge are two investment powerhouses that combine attractive long-term growth prospects with high-yielding dividends. Brookfield's diversified asset base, strategic acquisitions, and capital recycling strategy position it for continued growth, while Enbridge's robust capital-allocation framework, low-risk business model, and track record of dividend increases make it a compelling option for income-seeking investors. Both companies are excellent choices for generating passive income and double-digit total returns in the coming years.
Due to its robust capital-allocation framework, Enbridge is projected to experience EBITDA growth of at least 7% through 2026, enabling it to boost its cash flow per share at a 3% annual rate until 2026 and a 5% yearly increase afterwards, thereby continuing its tradition of dividend increases.
With its diversified asset base, strategic acquisitions, and capital recycling strategy, Brookfield Infrastructure has demonstrated a 15% compound annual growth rate (CAGR) for FFO per share from 2009 to 2023, making it a promising investment opportunity for investors seeking long-term growth and attractive dividend yields.
