Don’t Miss These Two Dividend Stocks This Month

Published on: Apr 4, 2024
Author: Amy Liu
  • Utility giant NextEra Energy continues to expand its business and reward investors with a 10% annualized dividend growth.
  • Enbridge has increased its dividend payment for 29 consecutive years, with a high dividend yield of 7.4%.

As April arrives, income investors should keep a close eye on these two high-yielding dividend stocks. The major market benchmarks have been soaring, which is good news in many respects. Here’s what you need to know before investing in these two dividend stocks:

NextEra Energy: Growing Dividends

At first glance, NextEra Energy (NEP) might seem like a dull utility company. To some extent, this is true, given its largest segment is Florida Power & Light. While regulated utility sectors typically see slow and steady growth due to the need for regulator approvals on rate and capital expenditure plans, NextEra Energy’s utility business remains popular due to a continuously expanding customer base. This segment has been the foundation for the company’s 10% annualized dividend growth rate over the past decade. Furthermore, the company’s clean energy business is set to drive dividend growth at a similar rate at least until 2026, with ambitious plans to double its clean energy generation capacity by then.

Enbridge: Reliable High Yield

Enbridge (ENB) operates various businesses, with a significant portion coming from its midstream oil and gas assets, accounting for roughly 85% of its EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). Pipeline operations generate reliable cash flows throughout the energy cycle. About 12% of EBITDA comes from its regulated natural gas utility operations in Canada, while the remaining percentage is from renewable energy assets with long-term contracts. Enbridge follows a slow and steady growth approach.

Considering the company’s 29-year dividend growth streak and the current 7.4% yield, this is quite favorable. This yield is over five times higher than what you would expect from a S&P 500 index fund! Additionally, Enbridge plans to acquire three additional natural gas utilities by 2024 to further solidify its business operations. While Enbridge stock might not be exciting, it is a great pick to consider for purchasing in April if you enjoy receiving hefty quarterly dividend checks.

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