Let me state right off the bat that I'm not really an income-oriented investor. I've got years before I plan to retire. My preference is to buy shares of companies that have great growth prospects and hold onto them for the long run.
But when the stocks of well-run businesses with solid growth opportunities that also happen to have impressive dividends are available at bargain prices, count me in. And with the COVID-19 pandemic still weighing heavily, there are several stocks that have been really attractive.
Three of these stocks were so attractive that I couldn't merely sit back and watch them. Here are three high-yield dividend stocks that I bought last week that I think you might want to put on your list, too.
1. Brookfield Infrastructure Partners
I first bought shares of Brookfield Infrastructure Partners (BIP -3.11%) earlier this year, well before the COVID-19 crisis hit with full force. My view then was that the company had a rock-solid business, it had good growth prospects, and it offered a quite juicy dividend. I haven't changed my mind on any of these points.
Brookfield Infrastructure truly does have a rock-solid business. It owns a wide range of infrastructure assets that include cell towers, data centers, natural gas pipelines, ports, railroads, and more. The great thing about these assets is that they generate steady revenue month in and month out.
Even with the COVID-19 outbreak, Brookfield Infrastructure continues to have good opportunities to generate growth. The company's strategy of continually evaluating its assets to sell off the lower-performing ones and invest in new assets with better prospects is just as relevant now as it was when I first bought shares in January.
There are two things that have changed for Brookfield Infrastructure since my initial purchase, though. Its valuation is more attractive after being hammered in the stock market crash. Also, the dividend yield is now north of 5%, higher than it was earlier this year. The bottom line is that everything that I liked about Brookfield Infrastructure is still intact, with some positives for the stock looking even better than before.
2. Brookfield Renewable Partners
I've had my eyes on a sister company of Brookfield Infrastructure, Brookfield Renewable Partners (BEP -2.24%), for several months now. Brookfield Renewable Partners, as its name indicates, owns and operates renewable energy sources.
Nearly half of Brookfield Renewable's investments over the last six years have been in hydroelectric power plants. Almost one-third of its capital during the period was deployed in wind-powered energy. The rest of its money went primarily to solar assets.
Coming into 2020, Brookfield Renewable already ranked as one of the largest and most successful renewable energy companies. Thanks to its recent deal to fully acquire TerraForm Power, the company is poised to become an even bigger juggernaut in renewable energy.
Brookfield Renewable targets a return of between 12% and 15% on its investments. I expect it will continue its track record of delivering these solid returns. The company also offers an outstanding dividend which currently yields more than 4.7%. Brookfield Renewable thinks that its focus on renewable energy makes it "one of the few future-proof stocks today." I agree.
3. Enterprise Products Partners
Energy stocks have been hammered over the last couple of months. It wasn't just the COVID-19 pandemic behind the shellacking. The oil price war instigated by Russia also took a major toll. Enterprise Products Partners (EPD -5.22%) wasn't spared from the carnage, with its shares falling more than 50% at one point before rebounding somewhat.
But Enterprise Products Partners is in a better position to weather the storm than most energy companies are. Last year, 86% of its gross operating margin was fee-based. This high percentage means that the company is largely insulated from the impact of lower oil and gas prices. Enterprise Products Partners also entered 2020 with the strongest financial position in its history and boasts one of the highest credit ratings in the midstream energy sector.
In mid-March, the company had over $1.4 billion in cash on hand and another $5 billion available from undrawn revolving credit facilities. Enterprise Products Partners isn't just in great shape to survive the current headwinds. I think it will thrive as it invests prudently for the long term.
Oh, yes, there's the matter of Enterprise Products Partners' dividend. Its dividend yield topped 11% when I bought the stock. I'm not worried about the company cutting its dividend. Even if it did, it would likely still be more attractive than most. With its solid long-term growth prospects added to a great dividend, my view is that this stock will handily beat the market over the next decade.
Why I plan to buy more shares
As I'm writing this, the stock market has rebounded nicely. I won't be surprised, though, if it declines somewhat over the next few months. However, I could be (and hope to be) wrong. Either way, I plan on buying more shares of Brookfield Infrastructure Partners, Brookfield Renewable Partners, and Enterprise Products Partners.
I think all three of these high-yield dividend stocks will deliver strong total returns over the long term. If I can scoop up more shares at lower prices and lock in higher yields, I'll be happy to do it. If I buy as the stocks make a nice comeback, that sounds good to me as well.
Whether you're an income-oriented investor or not, my view is that it's worth your time to check out Brookfield Infrastructure Partners, Brookfield Renewable Partners, and Enterprise Products Partners -- regardless of what happens next with the stock market.