Dividend yields have increased over the past year due to falling stock prices and higher payouts. This has created much more attractive opportunities for generating passive income these days.
Four dividend stocks that stand out this month for their high-yield and steadily growing payouts are Clearway Energy (QWEN -0.35%) (CWEN.A), Real estate income (O -0.62%), Morgan Children (KMI 1.37%)And Walgreen Boots Alliance (WBA 1.32%).
All the power needed to increase the payout
Shares of Clearway Energy are down 25% from their peak a year ago. That helped push its dividend yield up to 4.8%. The clean power producer plans to increase its payment towards the upper end of its annual target range of 5% to 8% until at least 2026.
The company has already locked in all the growth it needs to support this plan. Last year, Clearway sold its thermal assets for net proceeds of $1.35 billion. He reinvested that money in higher return renewable energy contracts. The company has already funded and closed more than $700 million in investments. Meanwhile, it has deals lined up for the remaining proceeds that are expected to close next year. These investments will increase its cash flow, allowing Clearway to increase its payout.
Expand its opportunity set to continue to grow the dividend
Realty Income’s dividend is currently at a yield of 4.9%, in part due to a 15% decline in the share price from the peak. THE REITs has multiplied by 120 its monthly payment since its IPO in 1994, including twice already this year.
A key driver of its dividend growth has been the acquisition of additional income-generating properties. Realty Income has improved its growth prospects by expanding into several new areas over the past year. She bought her first gambling property and invested in the consumer-centric medical industry, vertical farming, and Italy. These new sources of growth complement its ability to pursue make accretive acquisitions in strategic areas.
A cash machine
Kinder Morgan’s dividend yields 6.4%, in part due to a 13% drop in the share price. The gas pipeline giant has increased its payments for five consecutive years. He has already announced his intention to increase the payment by another 2% this year.
The company generates significant cash flow to support its dividend and growth. It has several growth projects underway that should help increase cash flow in the future. Meanwhile, it has a strong balance sheet, which gives it the added financial flexibility to make acquisitions or sanction new expansion projects as opportunities arise.
A healthy payment
Walgreen’s dividend currently yields 5.6%, largely due to a 27% drop in the share price over the past year. The company has been paying a dividend for more than 90 years and has increased its payout for the past 47 consecutive years. It only took him a few years before joining the elite group of Dividend Kings.
The integrated healthcare, pharmacy and retail company is investing in building its next growth engine in consumer-centric healthcare solutions. He has become one of the biggest players in primary care through his investment in VillageMD, which recently purchased Summit Health. It also acquired Sheids and CareCentrix to drive its consumer-centric healthcare growth strategy. These investments should also help boost the company’s earnings and cash flow, allowing it to maintain its dividend growth streak.
Nice Passive Income Booster
Clearway Energy, Realty Income, Kinder Morgan and Walgreens are all paying dividends that yield more than 4%, well above the 1.7% dividend yield on the S&P500. On top of that, they should all be able to continue increasing their payouts in the future. This combo makes them excellent stocks to buy this month for those looking to increase their passive income.
Matthew DiLallo has positions in Clearway Energy, Kinder Morgan and Realty Income. The Motley Fool holds positions and recommends Kinder Morgan. The Motley Fool recommends Realty Income. The Motley Fool has a disclosure policy.