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3 No-Brainer Dividend Stocks to Buy in September

By Keith Speights – Sep 19, 2021 at 5:55AM

Key Points

  • Brookfield Renewable ranks as a leader in an unstoppable industry.
  • Devon Energy offers a unique dividend structure that's especially rewarding to shareholders.
  • Innovative Industrial Properties has a clear growth runway and a fast-growing dividend.

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There shouldn't be any analysis paralysis with these great dividend stocks.

Some decisions practically make themselves. An ice cream cone or a molded slice of bread? A trip to Hawaii or a trip to the dentist? A Ferrari or a Yugo?

Most investing decisions require a significant amount of analysis. That's true even when there's a juicy dividend involved. However, some investing choices are surprisingly easy to make. Here are three no-brainer dividend stocks to buy in September.

A person standing in front of a chalkboard with a drawing of a thought bubble containing a stack of cash.

Image source: Getty Images.

Brookfield Renewable

A leader in an industry with virtually unstoppable growth prospects is almost always a great pick. But what if you throw in an attractive dividend plus the ability to buy the stock at a discount? Yes, please.

Brookfield Renewable (BEP 0.71%) (BEPC 0.24%) gives you all of the above. The company ranks as one of the world's top providers of renewable energy.

Countries and major corporations are scrambling to slash their carbon emissions. This trend will fuel increasing demand for renewable energy for years to come.

Meeting that demand is a major priority for Brookfield Renewable. The company's development pipeline includes 31,000 megawatts of capacity, which is a lot more than its current capacity of more than 20,000 megawatts. Brookfield Renewable is also focusing on repowering existing wind farms, a massive market opportunity that boosts energy production.

The company has increased its distribution by a compound annual growth rate of 6% over the last 20 years, and its dividend currently yields close to 3%. The renewable energy stock is well below the highs set earlier this year. Brookfield Renewable truly is a rare find -- a great dividend stock that's a bargain and has tremendous growth prospects.

Devon Energy

You might be tempted to turn your nose up at Devon Energy's (DVN 0.38%) dividend yield of only 1.45%. You also could wonder about buying the oil and gas stock since it's already nearly doubled this year. But any such concerns about Devon are misplaced.

The company's dividend yield is relatively low, solely because its share price has skyrocketed so much. But there's even more to the story: Devon pays a fixed-plus-variable dividend.

The fixed part gives the ho-hum 1.45% yield. On top of that, though, the company pays out up to 50% of incremental free cash flow after covering its fixed dividend.

The power of this approach was demonstrated recently. Devon declared a fixed-plus-variable dividend based on its Q2 results that was 44% higher than its previous quarterly dividend. 

As an added sweetener, the stock should still have plenty of room to run. Devon's business is firing on all cylinders. Wall Street's consensus one-year price target reflects a premium of more than 25% above Devon's current share price. 

Innovative Industrial Properties

Innovative Industrial Properties (IIPR 0.77%) is similar to both Brookfield Renewable and Devon Energy in a couple of ways. Like the other two companies, IIP offers an attractive dividend and strong growth prospects.

What sets IIP apart is its business model. The company is the leading real estate investment trust (REIT) focused on the medical cannabis industry. IIP currently owns 74 properties in 18 states. All of those properties are leased out to medical-cannabis operators.

The stock should be able to double by 2030, if not sooner. All IIP has to do is to keep making more sale-leaseback transactions. That shouldn't be difficult to do, with the U.S. medical-cannabis industry continuing to expand.

IIP continues to generate plenty of profits to fund its dividend program. It recently hiked its dividend by 7% from the previous quarter -- the 12th increase since IIP went public in December 2016. With a dividend yield of 2.45% and a clear path to growth, this dividend stock should be a really easy decision to add to your portfolio.

Keith Speights owns shares of Brookfield Renewable Corporation Inc., Brookfield Renewable Partners L.P., Devon Energy, and Innovative Industrial Properties. The Motley Fool owns shares of and recommends Innovative Industrial Properties. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Innovative Industrial Properties Stock Quote
Innovative Industrial Properties
IIPR
$122.14 (0.77%) $0.93
Devon Energy Stock Quote
Devon Energy
DVN
$68.78 (0.38%) $0.26
Brookfield Renewable Partners Stock Quote
Brookfield Renewable Partners
BEP
$28.49 (0.71%) $0.20
Brookfield Renewable Stock Quote
Brookfield Renewable
BEPC
$32.69 (0.24%) $0.08

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

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