Generating passive income can help put you on the path to financial freedom. It can help you offset some of your expenses, reducing the time you need Actively work to finance your lifestyle. The more passive income you can generate, the less you will depend on your career for income.
Buying dividend-paying stocks is a great way to start making lasting profits. passive income. Two great dividend stocks to buy for income right now are Brookfield Renewable (NYSE: BEPC)(NYSE: BEP) and Enbridge (NYSE: ENB). They pay high yield dividends which should continue to grow in the coming decades.
Brookfield Renewable has paid a very reliable dividend in the past couple of decades. The world leader renewable energy The producer has increased his payment at a compound annual rate of 6% since 2001. He increased his payment by at least 5% each year since 2011.
Currently, the company pays a dividend with a yield of over 5.6%. This is several times greater than the S&P 500‘s dividend yield of 1.2%. At that rate, every $100 invested in Brookfield Renewable shares would produce $5.60 in annual dividend income each year. That compares to only about $1.20 in dividend income from a similar investment in an S&P 500 index fund.
Brookfield Renewable aims to grow its dividend at an annual rate of 5% to 9% over the long term. It should have enough power to achieve that goal. The company has several growth drivers, including inflation-linked rate increases, rising energy prices, development projects and acquisitions. Those catalysts drive the company’s view that it can grow its funds from operations (FFO) per share at an annual rate of more than 10% over the next decade.
Development projects are a important Brookfield Renewable’s growth engine. It currently has a whopping 200 gigawatts (GW) of projects in development, compared to its operational portfolio of 37 GW. And it has about 65 GW of advanced-stage projects that it should complete by 2030. Development projects will increase its FFO per share by 4% to 6% annually over the next few years. With demand for renewable energy expected to continue growing, Brookfield should be able to continue expanding in the coming decades.
Enbridge has been an extremely reliable dividend stock. The Canadian oil pipeline and utility company has paid dividends to its investors for about 70 years and has increased its payouts annually for the past 30 consecutive years. Its dividend currently yields more than 6%.
The company generates very stable cash flow to support its high-yield dividend. About 98% of its profits come from cost-of-service agreements or long-term contracts. Those deals give Enbridge plenty of visibility into its profits. This is evident by the fact that it was on track to make its 19th consecutive year of achieving its annual financial guidance in 2024.