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4 Top Dividend Stocks Yielding More Than 4% to Buy Hand Over Fist This December
BEPBrookfield Renewable Partners L.P.(BEP) The Motley Fool·2024-12-03 09:35

Core Viewpoint - Dividend yields have been declining due to a strong stock market rally, with the S&P 500's yield dropping to approximately 1.2%, the lowest in about 20 years, down from 1.6% a year ago, despite the presence of attractive income opportunities in certain stocks [1] Group 1: Brookfield Renewable - Brookfield Renewable currently yields over 4.5% and has achieved a 6% compound annual growth rate in its dividend over the past 20 years [2] - The company anticipates annual growth of 5% to 9% in the future, supported by inflation-linked rate increases, margin enhancements, development projects, and M&A activities [3] - A significant backlog of development projects is expected to contribute an additional 4% to 6% to its funds from operations (FFO) per share each year through the end of the decade [3] Group 2: Chevron - Chevron currently yields just over 4% and has increased its dividend annually for 37 consecutive years, with an 8% increase earlier this year [4][5] - The company projects over 10% annual free cash flow growth through 2027, assuming oil prices average 60perbarrel,drivenbyahigh−returncapitalprogram[5]−Chevron′sstrategyincludesacquiringHess,whichcouldpotentiallydoubleitsfreecashflowby2027,whilemaintainingastrongbalancesheettosupportdividendgrowthandsharerepurchases[5]Group3:RealtyIncome−RealtyIncomecurrentlyyields5.560 per barrel, driven by a high-return capital program [5] - Chevron's strategy includes acquiring Hess, which could potentially double its free cash flow by 2027, while maintaining a strong balance sheet to support dividend growth and share repurchases [5] Group 3: Realty Income - Realty Income currently yields 5.5% and has increased its dividend for 30 straight years, with a 4.3% compound annual growth rate since going public [6][7] - The REIT expects to grow its adjusted FFO per share at a rate of 4% to 5% annually, supported by rent growth and acquisitions [7] - Realty Income has multiple funding sources for expansion, including internally generated cash flow, capital recycling, and access to private capital markets [7] Group 4: Verizon - Verizon currently yields more than 6% and has increased its dividend for 18 consecutive years, the longest streak in the U.S. telecom sector [8] - The company generates sufficient cash flow to invest in network expansion while maintaining a strong balance sheet [9] - Verizon's acquisition of Frontier Communications for 20 billion is expected to enhance its fiber network and earnings, supporting future dividend increases [10] Group 5: Summary of Top Dividend Stocks - Brookfield Renewable, Chevron, Realty Income, and Verizon are highlighted as top-tier dividend stocks with high-yielding payouts that are expected to continue growing, making them attractive options for dividend income this December [11]