3 High-Yielding Dividend Stocks You Can Buy and Hold for a Decade

Now that the Federal Reserve has finally lowered interest rates, it’s the perfect time to add dividend stocks to your portfolio that have the potential to generate big gains in the years to come.

However, dividend yield should never be the only criterion when choosing which dividend stocks to buy. Stocks that support high yields with stable and growing dividends have the greatest potential to grow over the long term and generate big returns for their investors. With that in mind, here are three solid, high-yielding dividend stocks you can buy now and hold for a decade.

High bank rate of return for the next decade

The first high-yield dividend stock that I consider promising is Transferring energy (NYSE:ET)yielding a solid 7.9%. Oil and gas companies offer some of the most bankable dividends in the entire energy sector thanks to their contractual business models. One could argue that there are better-known stocks with a stronger dividend history than Energy Transfer that are worth buying.

However, Energy Transfer shares generated significantly higher profits than those of larger companies, Enterprise Product Partners AND Enbridgein recent years and could continue to outperform given its growth and dividend targets.

ET data by YCharts.

Energy Transfer receives almost 90% of its income from commission-based contracts, meaning that only about 10% of its profits are exposed to the volatility of oil and gas prices. A large portion of these stable profits and cash flows go to its shareholders. To put this in perspective, Energy Transfer intends to pay out just over 50% of its distributable cash flow (DCF) as dividends, invest up to 40% of the DCF in growth, and use the remaining cash to pay down debt and buy back shares over the long term.

Energy Transfer is set to acquire WTG Midstream Holdings in a $3.3 billion deal that will expand its footprint in the Permian Basin. The acquisition and organic growth should give Energy Transfer enough muscle to increase its annual dividend per share by 3% to 5% in the near future. This dividend growth, combined with its high yield, could generate solid returns for investors who buy Energy Transfer stock now and hold it for a decade.

High-yielding stocks in a fast-growing industry

After global renewable energy capacity increased by 50% in 2023, the International Energy Agency (IEA) predicts that the renewable energy industry will grow at its fastest rate on record over the next five years. Buying renewable energy stocks now and holding them for the next decade is therefore an obvious investment move. While many stocks look tempting, one undervalued, high-yield renewable energy stock I would recommend today is Clearway Energy (NYSE: CWEN)(NYSE: CWEN.A).

The IEA predicts that U.S. solar and wind deployments will double by 2028. With 9 gigawatts of capacity in 26 states, Clearway Energy is one of the largest renewable energy producers in the U.S., specializing in wind, solar and energy storage.

Clearway Energy cut its dividend in 2019, but that wasn’t the company’s fault. A major customer, PG&E, filed for bankruptcy, which hit Clearway Energy’s cash flow. The renewable energy giant quickly regained investor confidence when it raised its dividend again in 2020 and has increased it every year since.

Through our partnership with Clearway Energy Group (CEG), a company jointly owned by Global Infrastructure Partners and Total EnergiesClearway Energy has access to CEG’s broad portfolio of renewable energy projects which it can acquire in roll-up transactions to grow its business.

For now, Clearway Energy is confident it can increase its annual dividend per share by 5%-8% through 2026. What’s more, the company is already working toward its next cash flow and dividend growth targets for 2027, making its 6.2% yielding stock an attractive buy and hold for the next decade.

These High Yield Stocks Could Deliver Multiple-Purpose Growth

Infrastructure is the backbone of the economy, and one of the best ways to invest in it is to buy shares of a successful, diversified company that owns a variety of infrastructure assets and uses them to the best of its ability. No company comes close Brookfield Infrastructure (NYSE:BIPC)(NYSE: BIP)making it a stock worth buying and holding for the next decade.

It is also a dividend stock, with the partnership units yielding 4.8%, while the corporate shares yield 3.8%. You would be surprised to learn that Brookfield Infrastructure Partners shares have tripled investor money over the past decade, thanks to dividend growth. The corporate shares were listed in 2020, and have tripled investor money since then, thanks to reinvested dividends.

BIP data by YCharts.

What has worked for Brookfield Infrastructure so far should continue to work for it in the future. Brookfield Infrastructure owns utilities, transportation, midstream energy and data infrastructure assets in the Americas, Europe and Asia Pacific. Due to the fundamental nature of these assets, 90% of the company’s cash flow is contractual and therefore highly predictable and stable.

A large portion of this cash flow is returned to shareholders in the form of dividends. Since 2009, Brookfield Infrastructure has grown its funds from operations at a compound annual growth rate (CAGR) of 15% and its dividend at a CAGR of 9%.

Brookfield Infrastructure is an intriguing play on some of the biggest global trends, such as digitalization and decarbonization. The growth opportunities are plentiful, and the company is confident of increasing its annual dividend by 5%-9% over the long term. This rate of dividend growth should support the stock’s profitability, paving the way for potential multibagger returns over the next decade.

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

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Neha Chamaria has no position in any of the stocks mentioned. The Motley Fool has a position in and recommends Enbridge. The Motley Fool recommends Brookfield Infrastructure Partners and Enterprise Products Partners. The Motley Fool has a disclosure policy.