Great dividend yields and great returns. That's a combination that most investors wouldn't want to pass up.
Three stocks have especially delivered on both counts in 2019. AT&T (T 1.17%), Brookfield Renewable Partners (BEP 2.85%), and The Carlyle Group (CG) each claim high-dividend yields of at least 5%. All three stocks have also soared by 30% or more so far this year.
What has made these companies so successful? And are they still smart stocks for long-term investors to buy now?
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1. AT&T
AT&T's dividend currently yields north of 5.4%. And the telecommunications and media company's track record when it comes to dividends is impressive. AT&T ranks among the elite group of stocks known as Dividend Aristocrats with its 35 consecutive years of dividend increases.
After a dismal performance in 2018, AT&T has been on fire so far this year. The stock has soared 31% year to date. One key reason behind this nice gain is AT&T's announcement of plans to launch its new HBO Max video streaming service in early 2020.
HBO Max will include around 10,000 hours of content from AT&T's TV networks such as CNN, TNT, TBS, truTV, The CW, Turner Classic Movies, and Cartoon Network, as well as its Warner Bros. and New Line movie studios. In addition, the new streaming service will offer original movies and TV series.
Another factor driving AT&T stock higher this year is the presence of an activist investor looking to shake things up. Elliott Management recently disclosed a $3.2 billion stake in AT&T. The hedge fund thinks that AT&T shares could move more than 60% higher from current levels by focusing on the huge opportunity in high-speed 5G wireless networks.
2. Brookfield Renewable Partners
Brookfield Renewable Partners offers a juicy dividend yield of 5.3%. The renewable energy company has increased its dividend by a whopping 437% over the last 10 years.
So far in 2019, Brookfield Renewable's shares are up more than 50%. The company has benefited from a string of positive news throughout the year, beginning with its strong 2018 fourth-quarter results announced in February that were accompanied by a 5% distribution increase.
Subsequent quarters have also been impressive. Brookfield Renewable reported exceptionally strong revenue growth for its wind and solar businesses in both the first and second quarters of 2019. The company's biggest moneymaker, its hydroelectric operations, also continued to enjoy solid momentum.
3. The Carlyle Group
The highest dividend yield among these three big winners belongs to The Carlyle Group, with its dividend currently yielding nearly 5.6%. Although the global investment firm's dividend has fluctuated up and down in recent years, the overall trend has been in a positive direction.
The Carlyle Group stock has also trended in a major positive direction so far this year, with shares skyrocketing more than 60% higher. This great performance stemmed from the company's sustained earnings growth and its prowess in dealmaking.
In the second quarter, for example, The Carlyle Group more than doubled its fee-related earnings from the prior-year period. It also boosted its total assets under management to a record-high $223 billion.
The company's dealmaking went in both directions. The Carlyle Group sold film and TV studio real estate and production services platform MBS Group for $650 million and reached an agreement to sell data-center infrastructure maintenance services provider Evernex. It also completed a $1 billion-plus acquisition of Italian manufacturer Forgital and teamed up with private equity firm Stellex Capital Management to acquire and merge maritime services company Vigor Industrial and ship repair and maintenance company MHI Holdings.
Are they buys now?
They say that two out of three ain't bad. That's my perspective with these three stocks.
Although The Carlyle Group has had a sizzling year-to-date performance, I'm inclined to remain on the sidelines with the stock. It's hard to keep up with all of the assets flowing into and out of the company's portfolio. A few bad deals could threaten The Carlyle Group's growth prospects.
On the other hand, I like both AT&T and Brookfield Renewable Partners. I think that AT&T should benefit as 5G is adopted across the U.S. I also think that it could achieve considerable success with HBO Max. My view is that Brookfield Renewable will continue to deliver solid growth as it expands its hydroelectric business.
The good news for investors is that with dividend yields of over 5%, neither of these stocks has to deliver much share price appreciation to still provide an attractive total return. If you're looking for great dividend stocks to add to your portfolio, I think AT&T and Brookfield Renewable Partners are definitely worthy of your consideration.
