Many investors have fallen in love with dividend stocks because they not only provide them with income but also tend to produce market-beating total returns. As a result, dividend lovers are always on the lookout for compelling stocks to buy. If that's you, three worth considering are pipeline giants Kinder Morgan (NYSE:KMI) and Williams Companies (NYSE:WMB) and renewable energy producer TerraForm Power (NASDAQ:TERP). All three energy companies offer dividend seekers above-average payouts that they expect to grow at an appealing rate in the coming years.

Another big raise coming in 2020

Kinder Morgan has a bit of a spotty track record when it comes to paying dividends. The energy infrastructure behemoth slashed its payout 75% in late 2015 so that it could use that cash to shore up its financial profile amid deteriorating conditions in the oil market.

A man in a suit with money symbols in one hand and hearts in the other.

Image source; Getty Images.

The company, however, has gotten its balance sheet back in tip-top shape, which has enabled it to start returning more money to shareholders. It boosted its dividend by 60% in 2018 and by another 25% last year, which has pushed its current yield up to 4.6%. The company expects to give its investors another 25% raise this year.

While Kinder Morgan likely won't increase its payout quite as briskly after this year, it has the financial flexibility to continue expanding its midstream operations. In its view, it can grow its cash flow per share by around a mid-single-digit annual rate in the coming years. That should enable the company to continue increasing its dividend, probably at a similar pace.

Lots of visible growth ahead

TerraForm Power, likewise, ran into some financial issues a few years back, which led it to stop paying dividends. However, leading alternative asset manager Brookfield took control of the company in late 2017 and implemented a turnaround plan. Those actions have shored up the company's balance sheet while improving the profitability of its legacy assets, enabling it to reinstate a dividend in 2018. That's given TerraForm the financial flexibility to make deals, which have grown its cash flow and payout at a meaningful rate. 

The company recently closed the purchase of a large portfolio of U.S. solar assets and has some more deals in the pipeline. Thus, it has plenty of power to achieve its plan to increase its dividend -- which currently yields 5.2% -- by 5% to 8% per year through at least 2022. 

Ample fuel to continue growing

Williams Companies also had to reset its dividend a few years ago as it adjusted to the new realities of the energy market. However, it has been growing that payout at a meaningful pace in recent years, including by 11.8% last year, boosting the yield up to its current level of 6.4%. 

The company, however, does expect more moderate increases in the future as it works to maintain a strong financial profile while continuing to expand its gas infrastructure footprint. In the company's view, its cash flow per share should grow by about 5% to 7% per year, which could allow Williams to increase its dividend by a similar rate.

Above-average yields and healthy growth

With the average dividend stock in the S&P 500 only yielding about 1.8% these days, this trio of energy companies will certainly catch the eye of income investors. Adding to their attraction is the fact that all three expect to grow their already above-average payouts at mid-single-digit rates over the next several years. They should therefore be able to produce strong total returns, making them great stocks for dividend lovers to buy. 


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