Dividend stocks are one of the finest ways to build wealth over time, but there's more to it than just the yield. While companies that pay regular dividends to their shareholders are bankable, those that also grow their dividends regularly often generate huge returns for their shareholders over time.
If you have some money to invest, here are three such incredible dividend stocks you could double up on now.
This company should grow its dividends no matter the administration
Brookfield Renewable (BEPC 1.69%)(BEP 0.40%) has been a rock-solid dividend stock so far, and I would be surprised if it doesn't continue to be. With President Trump freezing funds for clean energy projects, some investors fear Brookfield Renewable's growth could decelerate. It is, after all, one of the world's largest publicly traded renewable energy companies with an extensive global footprint in hydro, solar, and wind power, and distributed energy.
Investors in Brookfield, however, need not fear Trump's freeze. Demand for electricity won't fall, and the company has already locked in significant growth through its humongous and growing pipeline. To put some numbers to that, Brookfield Renewable has nearly 200 gigawatts, or 200,000 megawatts (MW) under development, and expects to commission around 10,000 MW per year.
NYSE: BEPC
Key Data Points
Last year set a record for the company, with its funds from operations (FFO) growing by 10%. Management recently announced a 5% dividend hike. It has increased its dividend every year since going public in 2011.
With management targeting annual FFO per unit of 10% and annual dividend growth of 5% to 9%, Brookfield Renewable is a no-brainer stock to double up on right now. While the units of the partnership yield 6.9%, the company's corporate shares yield 5.6%.
This stock could pay you even if oil falls
Oil and gas stocks can be volatile. Companies in the midstream energy space, however, are fairly immune to the volatility in commodity prices since they store, transport, and distribute oil and gas and other related products for a fee under long-term contracts.
Nearly 90% of Energy Transfer's (ET 0.48%) earnings, for instance, come from fee-based contracts. That pretty much explains why it is also a strong dividend payer.
Management made several growth moves in 2024. It acquired WTG Midstream for $2.3 billion in cash and 50.8 million shares of stock, formed a joint venture with Sunoco in the Permian Basin, and announced six major projects. WTG added nearly 6,000 miles of gas gathering pipelines to the company's portfolio in the Midland Basin.
Energy Transfer delivered record numbers for 2024 and generated $8.4 billion in distributable cash flow (DCF), up almost 11% from 2023. That DCF could conveniently cover the company's dividends and leave ample leeway for it to invest in growth.
In 2025, it expects to spend $5 billion on capital projects, with the bulk of it to be directed toward the Permian Basin. That's also $2 billion higher than its 2024 spending, illustrating the company's focus on growth.
Energy Transfer expects to raise its dividend by 3% to 5% every year. With the stock also yielding a massive 6.6%, investors who double up on this energy dividend stock now could reap rich returns in the coming years.
This dividend stock has been an unbelievable multibagger
If you have never invested in a boring company for its dividends, you must read this. You might be surprised to know the kinds of returns some of these stocks can earn for you. Waste Management (WM +0.82%) is one such stock you would even want to double up on now, given the company's latest numbers, outlook, and dividend growth goals.
Last year was big for Waste Management. It acquired Stericycle, North America's largest medical-waste management company, for $7.2 billion. Since management used debt to fund the acquisition, it has suspended share repurchases because it wants to use cash to repay debt first and fortify its balance sheet again. However, the company remains committed to growing its dividend.
Stericycle has added a strong, new market to Waste Management's portfolio and is expected to be a big boost for the company. For instance, the latter expects to grow its revenue by nearly 16% at the midpoint of its guidance range in 2025, twice its 2024 figure. The bulk of its top-line growth this year is expected to come from Stericycle.
Waste Management also expects its free cash flow (FCF) to grow by almost 18% in 2025. That's the most crucial number for income investors because a company pays dividends out of its FCF. In other words, growing FCF for a dividend growth stock almost assures higher dividends. And Waste Management has an incredible dividend track record: It has increased its payout for 22 consecutive years, including a 10% hike announced in December 2024.
You might be surprised to see how massively rich that dividend growth, with the payouts reinvested, has made investors over the years.
In just the past decade, shares have generated more than 400% in total returns. While past performance doesn't guarantee future returns, Waste Management stock has everything it needs to grow its dividends further and richly reward shareholders.
