Dividend stocks can be great long-term investments. Average dividend stock over the last 50 years S&P 500 It outnumbered non-payers by more than 2 to 1. The best returns came from companies that consistently increased their dividends.

There is a long list of great dividend growth stocks. Real Estate Income (HE -1.46%) And Brookfield Renewable (BEP 0.08%) (BEPC 1.37%) is currently at the top of my best to buy list. they offer high dividend yield and healthy growth prospects. These factors should allow them to generate attractive total returns in the coming years.

Building blocks for a solid total return

Realty Income has an outstanding track record of paying dividends. Real estate investment trust (REIT) recently declared his 653rd consecutive monthly dividend. REIT increased payouts for 108 consecutive quarters And It has increased payout 127 times since going public in 1994, at a compound annual rate of 4.3%. This increased dividend contributed to the company’s annual profit of 14.1%. total return Since its IPO 30 years ago.

The REIT currently offers a dividend yield of over 5.5%. This is several times higher than the S&P 500, whose dividend yield is below 1.5%.

Real Estate Income should be able to continue increasing its dividend in the future. It has a conservative dividend payout ratio for a REIT of 75% of adjusted funds from operations (FFO). It also has one of the strongest balance sheets in the industry. This gives him enough financial flexibility to continue acquiring income-producing real estate.

It has historically grown its adjusted FFO by approximately 5% per share. a combination rent increases, property acquisitions and corporate mergers with other REITs. Given the massive size of the commercial real estate market, Real Estate Income is perfectly positioned to continue growing at approximately the same rate in the future. When you add this growth rate to its high dividend yield, Realty Income can deliver total returns of over 10% each year.

Strong return potential

Brookfield Renewable has a strong track record of paying dividends. leading global renewable energy The manufacturer has increased its payout at a compound annual rate of 6% over the last two decades. It currently yields around 5%.

This high-yield payout is on very solid basis. The company’s dividend payout ratio decreased over the years Because it has grown its FFO much faster than its dividend, meaning a compound annual rate of 12% since 2016. This rate was around 77% on average in the first nine months of this year. Meanwhile Brookfield can be a strong investment A well-liquidized balance sheet further enhances the sustainability of its dividend.

The company plans to continue growing rapidly in the future. It believes it can grow its FFO per share by more than 10% annually over the next decade. its growth highly visible and was secured for the next five years, beyond which it became increasingly visible and secured.

A. main factor is the large backlog of development projects. The company’s advanced projects include 65 gigawatts. This helps reinforce the view that the company could commission around 10 GW of new capacity per year by 2030. Development projects alone should contribute 4% to 6% of its FFO per share each year. Add in higher energy prices, margin expansion activities and increased acquisitions, and Brookfield has multiple drivers of double-digit growth.

The company’s strong earnings growth rate supports its plan to increase its high-yield dividend by approximately 5% to 9% annually in the future. Add its growing revenue stream to its strong earnings growth rate and Brookfield can generate total returns of over 15% per year.

Attractive income and upside potential

Owned by Realty Income and Brookfield Renewable Great records of increased dividends. Thanks to them strong financial Given their profile and growth prospects, they need to continue growing their high-yield earnings in the future. This combination of revenue and growth should enable them to generate double-digit total annual returns. The strong return potential of such large companies makes them stand out as great dividend stocks to buy right now.