3 Supercharged Dividend Stocks You Can Buy Right Now
High dividend stocks can seem like an oxymoron. Don’t dividend stocks tend to be boring? Not necessarily.
Indeed, several big winners over the past 12 months also offer attractive dividend yields. Some of them still look like smart choices to buy even after their solid gains. Here are three of those supercharged dividend-paying stocks you can buy right now.
Actions of Brookfield Infrastructure Partners (NYSE: BIP) have climbed more than 25% since June 2020. Brookfield Infrastructure Company (NYSE: BIPC), which offers a way to buy the same underlying business without the tax complications of a limited partnership, has seen its stock skyrocket by more than 50%.
Both shares pay the same dividend. However, due to BIPC’s impressive run, its yield of almost 2.8% is much lower than BIP’s dividend yield of 3.8%.
Brookfield Infrastructure posted record results for the first quarter of 2021. Its funds from operations (FFOs) jumped 20% year over year. Profits increased by almost 60%. The company benefited from both organic growth and acquisitions.
The infrastructure is definitely in place right now. Business is booming for Brookfield’s utilities, railways, ports, pipelines, data centers and cell phone towers. The company hopes to succeed in its hostile takeover bid to Inter-pipeline, a deal that would further boost Brookfield’s revenue.
With the global economy poised to grow as COVID-19 restrictions relax, both Brookfield Infrastructure stocks are expected to continue to generate strong returns and excellent dividends.
CVS Health (NYSE: CVS) has been hit hard by the COVID-19 pandemic. However, the health care stock has rebounded significantly, jumping over 20% so far this year.
Of course, CVS’s 2.4% dividend yield isn’t the juiciest you can find. However, the return declined as the company’s shares rose. It’s not a bad problem to have, especially when the dividend remains strong.
Even after its strong performance this year, CVS Health’s valuation looks attractive. Its shares are trading at just over 11 times expected earnings. The S&P 500 futures earnings multiple is almost twice as high.
The greatest strength of CVS Health is undoubtedly its diversification in the health sector. The company is ranked among the leading pharmacy retailers, pharmacy benefit managers and health insurers. With the aging of the baby boomers, CVS should have significant growth opportunities in the future.
Enterprise Product Partners
Enterprise Product Partners (NYSE: EPD) stands out as another large dividend-paying stock that has generated sizzling returns in 2021. Shares of the mid-level energy company have risen more than 20% year-to-date.
Adding the EPD dividend to the mix significantly increases its total return. The company’s dividend is currently earning almost 7.5%. With such a high return, EPD does not need to generate a lot of equity appreciation to always be a strong winner for investors.
Can the company maintain dividends at current levels? Probably. EPD continues to generate significant distributable cash flow. A global economic recovery is expected to improve the fortunes of the company.
Yes, switching from fossil fuels to renewable energy sources could negatively impact EPD to some extent. However, this transition will take decades. In the meantime, EPD is one of a handful of intermediary companies with decisive advantages such as scale of operations and diversification.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are motley! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.