3 Dividend Stocks to Buy if You Need Income Today

If you're looking to make a little extra income these days, investing in dividend stocks can be a great option. Many companies pay their investors well, making them ideal for those seeking to generate some passive income. 

Three attractive dividend stocks are Enterprise Products Partners (EPD -0.28%), Crestwood Equity Partners (CEQP), and NextEra Energy Partners (NEP 3.64%). Here's why these three Fool.com contributors believe they're great options to buy if you need income right now. 

Big and well covered

Reuben Gregg Brewer (Enterprise Products Partners): When it comes to the North American midstream sector, Enterprise Products Partners stands among the industry's giants. It has a fee-based business, which makes its revenue and earnings fairly consistent from year to year. And the massive portfolio of pipelines, storage, transportation, and processing assets it owns would be virtually impossible to replace. It is a vital cog in the broader global energy sector.

For income-focused investors, though, the big attraction will be the master limited partnership's huge 7.4% yield. That yield, meanwhile, is backed by a distribution that has been increased annually for 24 consecutive years, an investment-grade-rated balance sheet, and a payout that was covered by distributable cash flow by a massive 1.9 times in 2022. There is no reason to think that Enterprise's distribution is at risk today.

The main caveat here is growth, or the lack thereof. Most of your return from an investment in Enterprise is going to be from the huge yield. However, if you are looking to maximize the income your portfolio generates, that probably won't be a big deal. And, historically, the distribution has grown at around the historical rate of inflation, so the buying power of the income you generate should, over time, be protected.

The big-time payout is on an increasingly sustainable foundation

Matt DiLallo (Crestwood Equity Partners): Crestwood Equity Partners currently offers a monster yield. The master limited partnership's distribution clocks in at more than 10%. Because of that, it can supply a lot of income this year.

While a double-digit yield often indicates a higher risk profile, Crestwood has taken several steps over the past couple of years to put its big-time payout on a sustainable foundation. It had another transformational year in 2022 by continuing to realign its midstream portfolio. The company focused on increasing its exposure to the highly economical and oil-rich Williston, Delaware, and Powder River Basins. It has done that by recycling capital, a strategy of selling non-core assets to fund acquisitions across those core regions.

The company recently finished its realignment by selling its natural gas storage assets. That deal will enable it to further strengthen its balance sheet following a series of acquisitions over the past year.

The realigned Crestwood expects to produce enough cash flow to cover its massive distribution by a comfy 1.6 to 1.8 times this year. That will give it the money to cover its growth capital spending plan with about $50 million to spare at the midpoint of its forecast. This free cash flow will enable Crestwood to continue paying down debt. The company's long-term target is to improve its already solid leverage ratio from 4.1 times following the latest sale to an even stronger metric of less than 3.5 times debt-to-EBITDA. At the high end of its forecast, Crestwood could get leverage down to 3.7 times by the end of next year. 

This strategy of using free cash flow to reduce leverage will put the company's big-time payout on an even firmer foundation. That makes Crestwood a great income-related investment for 2023 and beyond.

A bankable dividend growth stock

Neha Chamaria (NextEra Energy Partners): If you're looking for some passive income right now, NextEra Energy Partners is a rock-solid dividend stock to buy for one big reason: its double-digit dividend growth potential backed by earnings growth.

NextEra Energy Partners wants to increase its dividend per share annually by 12% to 15% through 2026. That means you could earn at least $3.64 per share in annualized dividends this year and enjoy a high yield: The stock yields 4.8% right now.

What's important to note is that this dividend growth and yield look sustainable given NextEra Energy Partners' line of business and growth plans. This is a clean energy company with long-term, contracted assets that generate steady cash flows; and it's the predictability in its cash flows that allows NextEra Energy Partners to pay regular dividends. In between, the company is consistently expanding its portfolio through acquisitions, and that provides it with incremental cash flows to boost dividends annually.

2022 was a strong year for NextEra Energy Partners as it increased its dividend per share by 15% and acquired nearly 1.2 gigawatts of renewables capacity from its parent company, NextEra Energy. The clean energy industry has huge growth potential, and NextEra Energy Partners looks well positioned to take advantage of the boom thanks to its foothold in the industry, its parent's backing, a strong balance sheet, and a well-planned growth strategy. With the company also prioritizing shareholder returns, NextEra Energy Partners is a bankable dividend stock to own.