The S&P 500‘s dividend yield is near record lows at around 1%. That’s making it a bit more challenging to find quality higher-yielding stocks to generate durable dividend income. However, there are still some high-quality income stocks available today.
The energy sector has several top-flight high-yielding dividend stocks. Here are three excellent options for those with $1,000 (or less) to invest right now.
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Brookfield Infrastructure
Brookfield Infrastructure (BIPC 0.69%)(BIP +0.13%) is a leading global infrastructure investor. The company owns and operates a diversified portfolio of economically crucial infrastructure across the utilities, transport, midstream, and data sectors. Most of its assets generate revenue under long-term contracts or government-regulated frameworks, providing it with stable, inflation-linked cash flows (85% of its funds from operations or FFO).
The company pays out 60% to 70% of its stable cash flows in dividends. It currently yields 4.5%. At that rate, a $1,000 investment would generate about $45 of annual dividend income.
Brookfield retains the remainder of its cash flow to help fund its growth. The company’s growth drivers include inflation-linked contractual rate increases, volume growth as the global economy expands, capital projects, and acquisitions. It currently has over $9.1 billion of capital projects underway, including new data centers, two semiconductor fabrication complexes, and utility expansions. Additionally, Brookfield has secured over $1.5 billion in new investments in the past year, including an investment in a leading U.S. refined petroleum products pipeline system.
Brookfield Infrastructure
Today’s Change
(-0.69%) $-0.28
Current Price
$40.34
Key Data Points
Market Cap
$5.4B
Day’s Range
$40.07 – $40.57
52wk Range
$34.18 – $51.72
Volume
7.6K
Avg Vol
1.2M
Gross Margin
63.46%
Dividend Yield
4.36%
Brookfield Infrastructure’s growth drivers should fuel more than 10% annual FFO per share growth going forward. That should support annual dividend growth of 5% to 9%. Brookfield has increased its dividend for 17 straight years (every year since its formation), growing it at a 9% compound annual rate.
Clearway Energy
Clearway Energy (CWEN 1.45%) is a leader in owning clean power generation capacity, including renewable energy and natural gas-fired power plants. It sells the electricity these assets produce to utilities and large corporations under long-term, fixed-rate power purchase agreements. Those contracts generate stable cash flow. Clearway targets paying less than 70% of its cash flow in dividends. It currently yields more than 4.5%.
Today’s Change
(-1.45%) $-0.55
Current Price
$37.13
Key Data Points
Market Cap
$4.6B
Day’s Range
$36.70 – $37.62
52wk Range
$27.67 – $41.74
Volume
353.1K
Avg Vol
990.7K
Gross Margin
15.34%
Dividend Yield
4.85%
The company plans to invest over $3 billion into new clean energy projects, with the potential to invest more if it secures digital infrastructure investment opportunities and additional acquisitions. This investment level should support 7% to 8%+ annual cash flow per share growth through 2030. Meanwhile, Clearway believes it can grow its cash flow per share at a 5% to 8%+ annual rate beyond 2031.
Clearway’s growth strategy should support continued dividend increases. The company has increased its payout every quarter since 2020.
Enterprise Products Partners
Enterprise Products Partners (EPD +0.33%) is one of the country’s largest energy midstream companies. The master limited partnership (MLP), which sends a Schedule K-1 Federal Tax form each year, operates pipelines, processing plants, petrochemical facilities, and export terminals. Most of its assets generate predictable cash flows secured by long-term contracts and government-regulated rate structures.
Enterprise Products Partners
Today’s Change
(0.33%) $0.12
Current Price
$36.57
Key Data Points
Market Cap
$79B
Day’s Range
$36.41 – $36.74
52wk Range
$30.01 – $40.16
Volume
457.2K
Avg Vol
4.2M
Gross Margin
13.45%
Dividend Yield
6.01%
The MLP currently has a distribution yield of more than 6%. It covered that payout by a comfortable 1.8 times last quarter. That enabled it to retain $1.5 billion in cash to reinvest in the partnership.
Enterprise Products Partners currently has $5.3 billion of major capital projects under construction, including new gas processing plants, a pipeline expansion, and some additional export capacity. It expects these projects to enter commercial service by the end of next year. They’ll give the MLP more fuel to increase its high-yielding distribution. Enterprise Products Partners has already raised its payout for 27 consecutive years.
Top-notch income stocks
Brookfield Infrastructure, Clearway Energy, and Enterprise Products Partners generate very stable cash flow, enabling them to support their high-yielding dividends and growth strategies. Those growth investments should provide these energy companies with the fuel to continue increasing their payouts. That makes them ideal high-yielding stocks to invest $1,000 in right now for income.