The 4 Best 4%+ Dividend Stocks to Buy Now for Passive Income for Years to Come

Interest rates have remained high for two years. One sec this is not great For borrowers, this is an excellent opportunity for those looking for investments that bring higher returns. Today, low-risk, fixed-income options such as government bonds and bank certificates of deposit (CDs), to give between 4% and 5%. This can provide investors with a nice stream of income.

However, higher yields are likely habit last A lot longer. The Federal Reserve will likely begin cutting interest rates later in the year, making now a great time to target yields. One of the best possibilities Is high yield dividend stocksSeveral companies offer yields exceeding 4%.

Meanwhileunlike bonds and bank term deposits, many those payouts should increase in the coming years. This sets investors up to earn a potentially lifetime of increasingly lucrative passive income. Four great options to take advantage of now are Brookfield Renewables (NYSE: BEPC)(NYSE:BEP), Kenvue (NYSE:KVUE), Mid-America Apartment Complexes (NYSE:MAA)AND Williams (NYSE:WMB).

Generating big income

Brookfield Renewable currently generates around 5% profit, which is several times more than S&P500‘S dividend yield (1.3%). Leading renewable energy dividend stocks paycheck is as balanced as possible.

The company generates Very stable cash flow by selling most of the renewable energy it produces to utilities and large corporate buyers under long-term contracts. These agreements typically link energy rates to inflation. That should keep Brookfield’s recurring cash flow up about 2% to 3% annually. In the meantime, it expects its margin-enhancing efforts to boost net income from its existing assets by about 2% to 4% annually.

Brookfield is also spending huge amounts of money Down capitalize on the renewable energy megatrend. It invests in a large and growing pipeline of development projects and routinely makes accretive acquisitions. Add these catalysts to other growth drivers, and Brookfield Renewable expects grow cash flow per share by more than 10% annually through at least 2028 (with much more growth to come). That should give it plenty of power to deliver on its plan to increase its dividend by 5% to 9% annually. The company has increased its payout at a rate of 6% annually since 2001.

A healthy dividend legacy

Kenvue currently yields about 4.5%. The leading consumer goods company generates strong, stable cash flow, driven by sustained demand for its iconic brands, which include Listerine, BAND-AID and Tylenol.

The company recently increased its dividend by 2.5% for the first time since TV version from the healthcare giant Johnson & Johnson last year. It continues the legacy left by its former owner, who increased its dividend for more than 60 consecutive years.

The story continues

Kenvue is well-positioned to continue to grow payouts. It expects rising demand for legacy products to drive steady organic revenue growth. In the meantime, it is using some of its strong cash flow to invest in innovative product development and pay down debt (reducing interest costs). These are the factors that increase cash flowbut also the probability of making an accretive acquisition, should enable Kenvue to follow in the footsteps of its former parent company and steadily increase its dividend.

Healthy demand should continue to boost dividends

Mid-America Apartment dividend yields over 4%. residential real estate investment trust (REIT) generates steadily increasing cash flow from rental income across its portfolio of apartments in the Southeast. The company focuses on growing metropolitan areas, which helps maintain high occupancy levels and rental growth.

The REIT is also investing in the growth of its portfolio. It currently has five new multifamily development projects under construction and plans to start four to six more in the next two years. strong balance sheet gives it is the financial flexibility to purchase housing estates and more land to support future investments.

These factors should enable the REIT to continue to grow its dividend. The company increased its payout by 5% at the end of last year, marking its 14th consecutive year. simple year of dividend growth.

Lots of fuel to increase your payout

Williams dividend yields 4.5% profit. Gas pipeline giant generates Very stable cash flow to cover this payout, backed by long-term contracts and government-regulated rate structures. The company has paid dividends every year for 50 years, while increasing the payout by 6% per year since 2018.

The company generates enough cash to cover its high-yield dividend by more than two times. This allows it to retain some cash to fund expansion projects and make accretive acquisitions. It also has a strong balance sheet to fund new growth investments.

Williams currently has a large backlog of organic expansion projects under construction that should be up and running by 2027, with several more in the pipeline. This visible backlog supports the view that earnings will grow by 5% to 7% annually over the long term, what should give that’s enough fuel to keep increasing the dividend.

These high-yielding payouts should continue growing

Brookfield Renewable, Kenvue, Mid-America Apartment Communities, and Williams all have dividend yields currently over 4%. They also have excellent records of increasing their dividends, which will likely continue in the coming years. For this reason, they look like great income stocks to buy before the Federal Reserve starts cutting interest rates.

Is it worth investing $1,000 in Brookfield Renewable now?

Before you buy Brookfield Renewable stock, consider the following:

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Matt DiLallo has positions in Brookfield Renewable, Brookfield Renewable Partners, Johnson & Johnson, Kenvue, and Mid-America Apartment Communities and has the following options: short August 2024 $20 puts on Kenvue. The Motley Fool has positions in and recommends Brookfield Renewable, Kenvue, and Mid-America Apartment Communities. The Motley Fool recommends Brookfield Renewable Partners and Johnson & Johnson and recommends the following options: long January 2026 $13 call options on Kenvue. The Motley Fool has a disclosure policy.

The 4 Best Dividend Stocks Yielding Over 4% to Buy Now for Decades of Passive Income was originally published by The Motley Fool