Investing in dividend-paying stocks can be a great way to generate passive income. Many companies pay out a portion of their earnings to investors through dividends.
While the average dividend stock returns around 1.5% these days (according to the S&P 500 Index performance), many offer even higher payouts. Morgan boy (NYSE: KMI), Verizon (NYSE: VZ), Brookfield Infrastructure Partners (NYSE: BIP)and Real estate agreement (NYSE: ADC) They stand out for their payouts. All four companies offer dividends with a yield of 4% or more. They also have excellent track records for increasing their payouts.
Add passive income to your portfolio
Kinder Morgan currently yields more than 5%. pipeline The giant backs up that high-yield dividend with very stable cash flow. About 68% of it comes from guaranteed purchase agreements and hedging contracts that pay the company a fixed rate regardless of volumes and commodity prices. Meanwhile, the bulk of its remaining earnings come from assets that generate fee-based cash flow with limited fluctuations based on their volume exposure.
The company distributes approximately half of its stable cash flow in dividends and retains the remainder to fund its expansion while maintaining its strong balance sheet.
Kinder Morgan currently has $5.2 billion in high-yield expansion projects Under way which will increase its cash flow in the coming years. It also uses its financial flexibility to make acquisitions that allow it to increase its capital (last year it bought STX Midstream for about $1.8 billion). These growth catalysts should give it more momentum to increase its dividend. Kinder Morgan achieved its seventh consecutive year of dividend growth in 2024.
Your Connection to a Prodigious Stream of Passive Income
Verizon currently offers a dividend yield of over 6%. The telecom giant recently achieved its 18th consecutive year of dividend growth, the longest current streak in the U.S. telecom sector.
The mobile and broadband company is cash-rich. Its operating cash flow totaled $16.6 billion in the first half of this year, enough to cover its capital expenditures ($8.1 billion) and dividend payments ($5.6 billion) with room to spare. It used that excess cash to strengthen its balance sheet.
Verizon’s balance sheet is steadily improving is enabling It is for strengthen its fiber business through the acquisition Border in a $20 billion cash dealThat acquisition should eventually help boost its free cash flow. Which should allow Verizon needs to pay down that debt. Meanwhile, its capital investments to grow its fiber and 5G businesses should also help boost its cash flow. These factors should allow Verizon to continue extending its dividend growth streak in the years ahead.
More income with this option
Brookfield Infrastructure Partners currently offers a dividend yield of around 5%. This is much higher than its corporate twin, Brookfield Infrastructure Corporation. (NYSE: BIPC)which offers a payout close to 4%. The only difference is that publicly traded shares limited company Sends its investors a Federal Tax Form Schedule K-1 Each year, as the corporation provides an easier way to file Form 1099-Div.
The economically equivalent entities pay the same quarterly dividend, which they plan to increase by 5% to 9% annually. That would extend Brookfield Infrastructure’s already excellent streak of growing its earnings. is Payout (15 consecutive years). The global infrastructure operator generates stable and growing cash flow to cover its lucrative payout. The company sees a combination of escalating inflation, volume growth, capital projects and acquisitions driving more than 10% annually FFO–growth per share in the coming years.
There is still a lot of growth left
Agree Realty currently has a yield of 4%. He Retail REIT has increased its dividend, which pays monthly, at a compound annual rate of 5.7% over the last 10 years.
The real estate investment trust focuses on the ownership of independent properties. net leased either leased land to high-quality retail tenants. Nearly 70% of its rent comes from national or regional tenants with investment-grade credit ratings. Meanwhile, the top tenant sectors are retailers resilient to e-commerce pressures and recessions, such as grocery stores, home improvement centers, and tire and auto service locations.
Agree Realty is constantly growing its portfolio of income-producing properties through acquisitions or investments in development projects. It has a strong balance sheet and a very long growth track record. Its current tenants still own more than 166,000 of its properties, a huge total potential market opportunity for the REIT of approximately 2,200 properties.
Passive income on the rise
Kinder Morgan, Verizon, Brookfield Infrastructure Partners and Agree Realty offer dividend yields above 4%, supported by stable cash flows and strong financial situation profiles. Furthermore, this quartet has done an excellent job of increasing their payouts over the years, and this seems likely to continue. These characteristics make them excellent dividend stocks. buy For those looking for an attractive and constantly advancing job. passive income streams.
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Matt DiLallo has positions in Brookfield Infrastructure Corporation, Brookfield Infrastructure Partners, Kinder Morgan and Verizon Communications. The Motley Fool has positions in Kinder Morgan and recommends Kinder Morgan. The Motley Fool recommends Brookfield Infrastructure Partners and Verizon Communications. The Motley Fool has a disclosure policy.
4 Dividend Stocks Yielding 4% or More to Buy for Passive Income Right Now was originally published by The Motley Fool