Unlocking High Dividends: Analysts' Top Picks for Yields Up to 10%
Wednesday, Nov 27, 2024 6:20 am ET
4min read Investors seeking substantial dividend income are always on the lookout for high-yielding stocks. While there's no universally accepted definition of a high-yield dividend stock, many investors consider a yield above 10% to be attractive. Analysts have identified two dividend stocks that offer yields up to 10% and have strong growth prospects.
1. Enbridge (NYSE: ENB)
Enbridge, a Canadian pipeline and utility company, offers a dividend yield of 7.5% as of early 2024. The company has a strong track record of dividend growth, having increased its payout for 29 consecutive years. Enbridge's yield is well above the S&P 500's average of around 1.5% and even outpaces the 10-year U.S. Treasury note, which is around 4.1%.
Enbridge's high yield and dividend growth are supported by its diversified business model and extensive capital project backlog. The company has secured projects worth CAD 27 billion ($19.4 billion) that are expected to drive earnings growth. Analysts expect Enbridge's earnings before interest, taxes, depreciation, and amortization (EBITDA) to grow by around 7% to 9% annually through 2026, fueled by expansion projects and acquisitions.
2. Enterprise Products Partners (NYSE: EPD)
Enterprise Products Partners is a master limited partnership (MLP) focused on energy midstream activities. As of early 2024, the company offers a dividend yield of 7.7%, significantly higher than the S&P 500 and 10-year Treasury note benchmarks. Enterprise Products Partners has a strong history of dividend growth, distributing an increasing amount of cash to unitholders for 60 consecutive quarters.
The company's high yield is supported by its stable cash flow, generated from long-term contracts and fee-based structures. Enterprise Products Partners has a diverse portfolio of assets, including natural gas processing plants, petrochemical facilities, and crude oil pipelines. The company's strong financial performance and growth prospects make it an attractive option for income-seeking investors.
In conclusion, investors searching for high-yielding dividend stocks should consider Enbridge and Enterprise Products Partners. Both companies offer yields above 7% and have strong growth prospects, supported by their diversified business models and extensive capital project backlogs. While these yields are attractive, investors should also evaluate each company's fundamentals, payout ratios, and growth potential to ensure they align with their investment goals and risk tolerance.
1. Enbridge (NYSE: ENB)
Enbridge, a Canadian pipeline and utility company, offers a dividend yield of 7.5% as of early 2024. The company has a strong track record of dividend growth, having increased its payout for 29 consecutive years. Enbridge's yield is well above the S&P 500's average of around 1.5% and even outpaces the 10-year U.S. Treasury note, which is around 4.1%.
Enbridge's high yield and dividend growth are supported by its diversified business model and extensive capital project backlog. The company has secured projects worth CAD 27 billion ($19.4 billion) that are expected to drive earnings growth. Analysts expect Enbridge's earnings before interest, taxes, depreciation, and amortization (EBITDA) to grow by around 7% to 9% annually through 2026, fueled by expansion projects and acquisitions.
2. Enterprise Products Partners (NYSE: EPD)
Enterprise Products Partners is a master limited partnership (MLP) focused on energy midstream activities. As of early 2024, the company offers a dividend yield of 7.7%, significantly higher than the S&P 500 and 10-year Treasury note benchmarks. Enterprise Products Partners has a strong history of dividend growth, distributing an increasing amount of cash to unitholders for 60 consecutive quarters.
The company's high yield is supported by its stable cash flow, generated from long-term contracts and fee-based structures. Enterprise Products Partners has a diverse portfolio of assets, including natural gas processing plants, petrochemical facilities, and crude oil pipelines. The company's strong financial performance and growth prospects make it an attractive option for income-seeking investors.
In conclusion, investors searching for high-yielding dividend stocks should consider Enbridge and Enterprise Products Partners. Both companies offer yields above 7% and have strong growth prospects, supported by their diversified business models and extensive capital project backlogs. While these yields are attractive, investors should also evaluate each company's fundamentals, payout ratios, and growth potential to ensure they align with their investment goals and risk tolerance.
Disclaimer: the above is a summary showing certain market information. AInvest is not responsible for any data errors, omissions or other information that may be displayed incorrectly as the data is derived from a third party source. Communications displaying market prices, data and other information available in this post are meant for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any security. Please do your own research when investing. All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk, it does not assure a profit, or protect against loss in a down market.
