Double your money in a short time. Few investors would walk away from such an opportunity. Of course, there's no guarantee that any investment will allow you to double your money. Risk comes joined at the hip with potential rewards.
However, achieving 100% returns in the next six and a half years is not beyond the realm of possibility. Here are three ultra-high-yield dividend stocks that could realistically deliver 100% total returns by 2030.
1. Ares Capital
Ares Capital (ARCC +1.54%) is the largest publicly traded business development company (BDC). The company provides financing to middle-market businesses with a special focus on the upper end of that market.
NASDAQ: ARCC
Key Data Points
BDCs are required to return at least 90% of earnings to shareholders in the form of dividends. Ares Capital has had plenty of profits to pass back to investors. Its dividend yield stands at nearly 9.6%. The company's dividend is reliable too -- stable to increasing for 14 years and counting.
This stock would generate a return of over 80% by the end of 2030 from its dividends alone even if its share price went nowhere. However, if history is any guide, Ares Capital should give investors plenty of share price appreciation on top of the juicy dividend payouts. The company's total return has trounced the S&P 500 over the long run.
Ares Capital meets the financing needs of a growing market. Many banks have shunned the middle market, leaving a wide-open opportunity for BDCs to provide private capital. With Ares' great track record, solid financial position, and fantastic dividend, I think the stock has a good shot at doubling investors' money by 2030.
2. Enterprise Products Partners
Enterprise Products Partners (EPD +1.08%) is a limited partnership (LP) that owns midstream energy assets. Those assets include over 50,000 miles of pipeline, 40 natural gas processing plants, 26 fractionators, and more.
NYSE: EPD
Key Data Points
Midstream energy LPs are known to reward investors handsomely with attractive distributions. Enterprise Products Partners is no exception. Its distribution yields nearly 7.2%. The company has also increased its distribution for 25 consecutive years.
Those distributions should go a long way toward enabling Enterprise Products Partners to deliver a total return of 100% or more by 2030. Don't dismiss the prospects of the stock performing well, though.
The demand for natural gas and natural gas liquids should grow over the coming years. This should drive demand for Enterprise Products Partners' pipelines and midstream facilities, especially with the U.S. ranking as the largest liquefied natural gas exporter.
3. Pfizer
Pfizer (PFE +0.13%) is the most well-known of these three stocks. The company is one of the world's largest drugmakers. It markets a wide range of products including autoimmune disease drugs, cancer therapies, and vaccines.
NYSE: PFE
Key Data Points
My definition of an ultra-high-yield dividend stock is one with a dividend yield at least four times greater than the dividend yield of the S&P 500. Pfizer's dividend yield of nearly 6.1% meets that criterion.
Like Ares Capital and Enterprise Products Partners, Pfizer doesn't have to generate a huge amount of share appreciation to double investors' money by 2030 thanks to its attractive dividend. Some might worry that the company won't be able to deliver much growth at all because of declining sales of its COVID-19 products and the impending loss of patents for several of its top-selling drugs.
However, I expect Pfizer's COVID-19 revenue to stabilize. The company projects an additional $20 billion per year in revenue by 2030 from new product launches and new indications for existing products. That's more than enough to offset the revenue decline from the looming patent cliff. Pfizer also anticipates another $25 billion in new revenue from business development deals by 2030.
All of this translates to solid growth. Combined with the dividend payouts, I think this growth could enable Pfizer to easily produce a 100% total return over the next six and a half years.
