When you're in retirement, your only financial goal might be extending your nest egg as long as possible. You may not need to chase growth and maximize returns, and might instead prioritize income. But not all dividend stocks are created equal

Individual investors should favor companies with ample, sustainable cash flow and a tailwind or two that could drive both stock returns and dividend payouts higher for the foreseeable future. Those criteria are certainly met by cardboard leader WestRock (NYSE:WRK) and renewable energy powerhouse NextEra Energy (NYSE:NEE). Here's why they're worth a closer look.

A kid playing inside an airplane made from cardboard boxes.

Image source: Getty Images.

Overlooked, but for how long?

Pulp and paper stocks have not performed very well in recent years. Investors can blame any number of issues, including the ongoing trade war between the United States and China, worryingly high pension obligations, and high costs for modernization investments required to remain competitive. 

While some businesses are struggling with those headwinds, WestRock is relatively well-positioned for the future. It hasn't felt much impact from the trade war, has a fully funded pension, and hasn't struggled to pay for large projects aimed at boosting operating efficiency. But that hasn't been enough to help the stock exceed the industry's poor performance, as shares have fallen 36% since the beginning of 2019.

Then again, that just creates a solid opportunity for investors with a long-term mindset. WestRock now trades at 0.78 times book value and just 11 times trailing earnings. The depressed stock price has pushed its annual dividend yield past 5%.  

More importantly, the business is pushing ahead with major initiatives aimed at capturing growing market share within emerging trends. WestRock offers on-demand box printing, allowing businesses to park a cardboard box folding machine at their locations to create boxes with unusual dimensions. That's helped customers with highly variable product sizes, such as U.S. Auto Parts, avoid excess shipping fees from carriers.

WestRock is also looking to develop solutions for ships in own container (SIOC) requirements being implemented by Amazon (which admittedly may only offset lost revenue from direct sales of cardboard boxes, but it's an offensive move nonetheless) and paper-based packaging solutions for customers eager to ditch plastic. The latter could create hundreds of millions of dollars in incremental revenue in the next year or two. 

Simply put, when the pulp and paper industry begins to be fairly valued again, shares of WestRock will be poised for a breakout. Patient investors can still collect a healthy income stream in the meantime thanks to the 5% dividend.

A view looking up at a wind turbine and its blades.

Image source: Getty Images.

One of the best stocks on the market

In stark contrast to WestRock, not much has stopped the ascension of NextEra Energy stock. Shares have delivered a 10-year return of 490% with dividends included, compared to a total return of "only" 244% for the S&P 500 in that span. The growth could continue for the foreseeable future, which should keep the stock's annual dividend payout -- currently yielding 2.2% -- moving higher, too. 

NextEra Energy is often called an electric utility, and while it does own a couple of electric utilities in Florida, its most prolific income engine and growth opportunity resides in its power generation subsidiary. NextEra Energy Resources (NEER) builds, owns, operates, and sells power generation assets across the United States. It is one of the largest capital investors in the country, generates more electricity from the wind and sun than any other company on the planet, and owns more installed wind power capacity than all but seven countries

NEER converted over 37% of total revenue into net income in the first six months of 2019. That's a staggering amount, aided in part by subsidies provided to renewable energy power sources, but the growth opportunity ahead is what should grab investors' attention. 

NextEra Energy is very optimistic about the near- and long-term future of renewable energy in the United States. The company expects electricity generated from wind and solar assets to be the lowest-cost source of energy by 2024. It thinks the country will add an average of 20,000 megawatts of combined wind and solar power capacity each year between now and 2022 -- and it plans to deploy at least $20 billion in capital to help make that a reality. The company also estimates the nation could add as much as 35,000 megawatts of new wind and solar per year from 2023 through 2030.  

That sets the stage for NEER and its deep-pocketed parent to realize a relatively long growth runway. It also supports NextEra Energy's plan to grow adjusted earnings per share (EPS) 7% per year from 2018 through 2022 and to increase its dividend 13% per year through 2020. If the company achieves that and continues executing, then long-term shareholders will continue to be rewarded.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.