If you have $1,000 to invest right now, some of the best stocks to look at are dividend stocks.
But there isn't one right way to invest in a dividend stock, so here are three different high yield stocks that will appeal to different types of investors, from a dividend growth stock to a boring and reliable high yielder to a company in the middle of a turnaround.
And all of them have yield that are multiples of the scant 1.3% you can collect from an S&P 500 index (^GSPC 0.83%) fund.
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1. NextEra Energy offers a 10% dividend growth rate
Most investors think of dividend yield when they think about a dividend stock, which is only logical. On that score NextEra Energy (NEE 1.33%) offers a substantial 3.2% yield, more than twice the S&P 500 index yield (and the lowest yield on this list).
However, there's a secondary part to dividends, and that's the growth of the dividend over time.
NextEra's dividend has been increased at a 10% annualized clip over the past decade. And management expects to keep that rate going for at least the next couple of years.
While a 10% dividend growth rate is fast for any company, it is outstanding for a regulated utility like NextEra Energy. But the key is that this business is actually two businesses in one.
The core is the company's regulated utility operation in Florida, which is a reliable foundation. The second part is NextEra Energy's clean energy business, which is among the largest producers of solar and wind power in the world.
It sells power under long term contracts and is benefiting from the ongoing shift away from carbon fuels. Energy transitions take decades, so there is likely to be a lot more growth ahead for NextEra Energy on this front. And that should provide ample opportunity for more large dividend increases.
If you are a dividend growth investor you'll want to take a look at NextEra Energy today. A $1,000 investment will get you around 14 shares or so.
2. Enbridge is a reliable high yield tortoise
Enbridge (ENB -0.09%) operates in the energy sector, which is known for being highly volatile. Only it operates in the midstream space, which basically connects the upstream (drilling) to the downstream (chemicals and refining) and the rest of the world.
Midstream businesses own things like pipelines, storage, and transportation assets, and they generally charge fees for the use of this energy infrastructure. That creates reliable cash flows that aren't dependent on the price of the commodities moving through the systems.
Enbridge is a rock-solid business.
The strength of Enbridge's business is highlighted by the fact that it has increased its dividend annually, in Canadian dollars, for three decades and counting. The dividend yield, meanwhile, is a lofty 6%. This stock won't excite you, but that's the point. It is built to keep paying a reliable dividend in good markets and bad.
If you buy Enbridge today, a $1,000 investment will allow you to buy around 22 shares of the Canadian midstream giant.
3. EPR Properties is turning itself around and paying you well to stick around
EPR Properties (EPR 0.81%) is a real estate investment trust (REIT) that owns experiential assets. Think amusement parks, ski resorts, casinos, and movie theaters. These are the types of assets that are hard to replace with digital experiences, so the approach the REIT is taking is very interesting.
That said, bringing people together in group settings was a terrible focus during the height of the coronavirus pandemic. At that point people were asked to socially distance and non-essential businesses were shut down. EPR Properties ended up suspending its dividend to ensure that the company could muddle through the uncertain period and help its tenants do the same.
Now that the pandemic is in the rearview mirror, EPR Properties is back to dividend growth. And it is revamping its portfolio to focus on the most attractive experiential properties while moving away from less desirable ones. Most notably, it is looking to reduce its overweighting in the movie theater space.
Repositioning the portfolio will likely take a few more years, but the adjusted funds from operations (FFO) payout ratio was a healthy 75% or so in the first quarter of 2025. The REIT is still on solid dividend ground. But, more to the point, the rent coverage for the REIT's tenant roster is stronger today than it was prior to the pandemic.
With a lofty 6% yield and a dividend that is back on the growth track, EPR Properties is a good fit for investors that enjoy turnaround situations. A $1,000 investment will buy you around 17 shares.
An option for every kind of dividend investor
If you are looking for the best dividend stock for you today, it is likely that one of the above stocks will peak your interest. They cover a lot of investment ground, with NextEra appealing to dividend growth investors, Enbridge to investors that prioritize high yields and reliability, and EPR Properties offering turnaround appeal. If you take the time to dig into this trio of dividend stocks it is highly likely that one will find a home in your portfolio right now.
