Buy These 3 Stocks Now for Decades of Passive Income

Buying high-quality dividend stocks can be your ticket to earning a lifetime of passive income. Many companies have a long history of sustaining and growing their payouts and if they can keep that going, they can enable you to steadily cover more of your expenses with dividend income. 

Three top-tier dividend stocks for durable passive income are Enterprise Products Partners (EPD -0.47%), Brookfield Infrastructure (BIPC -0.51%) (BIP -1.02%), and NextEra Energy Partners (NEP 1.62%). Here's why three Fool.com contributors think they're great buys right now for those seeking a lifetime of steadily rising dividends. 

As simple as collecting tolls

Reuben Gregg Brewer (Enterprise Products Partners): Midstream companies like Enterprise Products Partners own things like pipelines and storage, processing, and transportation assets. These are expensive to build, but generate revenue for decades with modest additional spending. The most conservative names in the sector, like Enterprise, focus on fee-based assets, which means this master limited partnership (MLP) gets paid for the use of its infrastructure, with the price of what flows through it less important than demand.

It is, basically, a toll taker. That's great for income investors, because the cash flows these assets generate tend to be fairly consistent, which is one of the reasons Enterprise has managed to increase its distribution annually for over two decades. And with second-quarter distributable cash flow covering the distribution by a huge 1.9 times, there's very little reason to believe that this streak is going to end. The MLP offers a highly attractive 7.2% yield.

The big question mark is the global push toward clean energy, which could eventually lead to reduced demand for the commodities now running through Enterprise's pipes. Only oil and natural gas demand are expected to increase through at least 2040, according to the International Energy Agency. And then they are likely to level off for a while before slowly tapering. That's plenty of time for Enterprise to both generate strong cash flows to support its distribution and adjust to the world around it.

Built to endure

Matt DiLallo (Brookfield Infrastructure): Brookfield Infrastructure built its business to produce a steadily rising income stream for its investors. The global infrastructure operator has increased its payout every year since its formation in 2009 and the company has grown its dividend payment at a roughly 10% compound annual rate over those 13 years. 

A big driver is its business model. The company owns a diversified portfolio of stable infrastructure businesses. Brookfield gets 90% of its cash flow from long-term contracts and government-regulated rates, with roughly 70% of those rate structures indexed to inflation. That provides the company with a strong foundation of steadily rising cash flow.

Meanwhile, Brookfield pays out 60% to 70% of that cash flow via its dividend, which currently yields 2.9%. That gives it a nice cushion while allowing it to retain the other 30% to 40% for maintenance and expansion projects. Brookfield also has a strong, investment-grade balance sheet, further enhancing its ability to invest in expansion.

Along with rising volumes as the global economy grows, those expansions and inflation-driven rate increases should help organically grow the company's cash flow per share by 6% to 9% per year. That supports Brookfield's plan to increase its dividend at a 5% to 9% annual rate.

Brookfield can further boost its growth rate through its capital recycling program. The company routinely sells mature infrastructure businesses and reinvests the proceeds into higher-returning investment opportunities. It should have no shortage of options given the estimated $80 trillion needed to maintain and expand global infrastructure through 2040.

With a business built to endure, and the financial flexibility to capitalize on the enormous global infrastructure opportunity, Brookfield Infrastructure should be able to supply decades of passive income to its investors.

This stock is aiming for double-digit dividend growth

Neha Chamaria (NextEra Energy Partners): While every dividend stock earns you passive income, not all of them have the potential to grow their payout over time. The ones that do often have a strong history of dividend growth, and more importantly, have big growth catalysts ahead that can support larger dividends. NextEra Energy Partners has both: The company has increased its dividend payout every quarter since going public in 2014 and is among the top players in the high-potential clean energy industry.

NextEra Energy Partners started with roughly 1 gigawatt (GW) of renewables capacity in 2014. By 2021, its portfolio had grown to 8 GW and its customer base had grown by more than 12-fold. The company currently generates more than half of its cash available for distribution from wind energy, and of the remaining, almost equal parts come from solar energy and natural gas pipelines. Those assets generate stable cash flows under long-term contracts, which is why the company has been able to grow its dividend per share by more than 50% in just the past five years.

What are the chances that NextEra Energy Partners will be able to pay you regular and growing dividends for decades to come? High, I'd say. Backed by sponsor NextEra Energy, NextEra Energy Partners has three avenues to expand its portfolio: acquisitions from its sponsor's clean energy arm, third-party acquisitions, and organic growth. The company is already confident about its ability to tap opportunities and generate robust cash flows, so much so that it's targeting compound annual dividend per share growth of 12% to 15% between 2021 and 2024.

That's some solid passive income growth to bank on, and if you buy NextEra Energy Partners stock now, you also get to enjoy a decent dividend yield of 3.6%.