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3 Top Dividend Stocks to Buy in September

By Matthew DiLallo – Sep 5, 2021 at 9:06AM

Key Points

  • Brookfield Renewable has a long history of generating a steadily rising income stream.
  • Medical Properties Trust offers a healthy payout in today's low-yield environment.
  • Crown Castle continues to deliver above-average dividend growth.

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These companies offer a compelling combo of yield and upside potential.

Dividend stocks can make great investments. The average dividend stock has generated a more than 12.8% total return from 1973 through the end of last year, according to data from Ned Davis Research and Hartford Funds. That has outperformed the S&P 500's slightly less than 12.6% total return during that time frame. Meanwhile, the best results came from companies that steadily increased their dividends, with growers delivering a 13.2% total return. Further, dividend growers achieved those higher returns with less volatility than other stocks.

While that historical performance suggests dividend investors should seek growth over yield, some companies offer the best of both worlds. Three top dividend stocks that fit that bill are Brookfield Renewable (BEP 1.08%) (BEPC 0.80%)Medical Properties Trust (MPW 0.46%), and Crown Castle International (CCI -1.09%). Here's why dividend investors will want to consider adding them to their portfolio this month. 

A person measuring a chart showing growth.

Image source: Getty Images.

A powerful dividend growth stock

Brookfield Renewable has an excellent track record of creating shareholder value. The renewable energy producer has grown its dividend -- which currently yields 2.7% (more than double the S&P 500's 1.3% yield) -- at a 6% compound annual rate since 2012. That's helped power a 20% annualized total return since its inception. 

The company is in an excellent position to continue growing its dividend in the future. Brookfield sees a combination of factors -- including acquisitions, development projects, and higher power rates -- driving up to 20% annual cash flow per-share growth through 2025. That's almost double its growth rate over the past decade. This forecast easily supports Brookfield's view that it can increase its dividend by 5% to 9% annually in the coming years.

That makes it one of the best renewable energy dividend stocks and an excellent option for investors seeking a steadily rising income stream. Brookfield's combination of yield and growth should give it the power to continue generating strong total returns in the coming years.   

Healthy dividend growth

Medical Properties Trust is a real estate investment trust (REIT) focused on owning hospitals. The REIT has done a great job enriching investors over the years. Since its initial public offering in 2005, the company has generated a roughly 12.1% total annual return. That has outpaced the S&P 500's 10.8% total annual return during that time frame. 

Medical Properties also has a solid dividend growth track record. It has increased its dividend in each of the last eight years, growing it at a 5% annual rate. It currently yields 5.2%, which is well above average. 

The company is in an excellent position to continue growing its high-yielding dividend. Medical Properties Trust has already secured $3.6 billion of new investments this year, slightly more than it closed in 2020. That has it on track to continue growing its cash flow per share at a double-digit annual rate. While the REIT is already the second-largest non-government hospital owner globally at $21.4 billion in assets, it only owns a small fraction of the global hospital real estate market. With ample financial flexibility, Medical Properties Trust has the firepower to continue expanding its hospital portfolio and dividend in the coming years. 

Connected to a megatrend

Crown Castle is also a REIT, though it focuses on owning and operating communications infrastructure like cell towers, small cells, and fiber optic cables. It has delivered strong total returns since converting to a REIT in 2014. Overall, it has produced a 17.8% annual total return since then, comfortably above the S&P 500's 14.6% total return during that time. 

The communications infrastructure company has been an excellent dividend stock in recent years. It has grown its payout at a 9% compound annual rate since 2017, outperforming its 7% to 8% long-term target. 

The company believes it can continue growing its dividend -- which yields 2.7% -- by at least its target rate for years. Supporting that view is the decade-long investment cycle it sees ahead for 5G infrastructure as mobile carriers roll out their networks across the country.

Top-notch options for income seekers

Brookfield Renewable, Medical Properties, and Crown Castle are top-notch dividend stocks. All three companies offer above-average-yielding payouts that they expect to continue growing in the future. That should enable them to maintain their market-beating ways, making them great options to add to your income portfolio this September.

 

Matthew DiLallo owns shares of Brookfield Renewable Corporation Inc., Brookfield Renewable Partners L.P., Crown Castle International, and Medical Properties Trust. The Motley Fool owns shares of and recommends Crown Castle International. The Motley Fool has a disclosure policy.

Stocks Mentioned

Crown Castle  Stock Quote
Crown Castle
CCI
$140.17 (-1.09%) $-1.54
Medical Properties Trust Stock Quote
Medical Properties Trust
MPW
$13.01 (0.46%) $0.06
Brookfield Renewable Partners Stock Quote
Brookfield Renewable Partners
BEP
$29.01 (1.08%) $0.31
Brookfield Renewable Stock Quote
Brookfield Renewable
BEPC
$32.70 (0.80%) $0.26

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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