Dividend Stocks to Buy: If you're scoping out stocks to grab this March, kick off your hunt by checking out dividend payers like NextEra Energy (NEE 2.89%), Enterprise Products Partners (EPD), and Stanley Black & Decker (SWK 1.51%). Each one's got its own charm for various investors, but they're all serving up some pretty enticing opportunities right now. Let's dive into each real quick.
1. NextEra Energy is a reliable dividend grower
For dividend enthusiasts eyeing NextEra Energy's 3.7% dividend yield – fairly standard for a utility – it might seem like just another option in the crowd. But dismissing it swiftly would be a mistake, especially if you're keen on dividend growth. Over the past decade, NextEra has consistently upped its dividend by around 10%, maintaining this streak for nearly 30 years. Here's the kicker: thanks to a recent downturn in the utility sector, NextEra's yield is now among the highest it's been in a decade, signaling a potential stock bargain.
When you invest in NextEra, you're getting a unique blend of a somewhat mundane regulated utility business (making up about 70% of the company) and a rapidly expanding clean-energy arm (30%). Although an uptick in interest rates might slightly temper the growth, the company is still projecting an impressive 6% to 8% earnings growth until 2026. In the utility sector, that's a swift pace, promising a steady climb for the dividend. Savvy long-term dividend investors have a chance to snag a top-notch company at a reasonable price today – definitely not something to overlook.
2. Enterprise Products Partners is a reliable energy stock
Enterprise Products Partners is a powerhouse in the midstream energy infrastructure game, boasting one of the largest portfolios across North America. Their revenue comes from fees for utilizing their assets, making the actual prices of oil and natural gas taking a backseat to demand. Fortunately, the outlook for energy demand remains robust for the foreseeable future, even with the increasing prevalence of clean energy due to a growing global population and improving living standards.
Now, here's where it gets really exciting: a jaw-dropping 7.3% distribution yield. This isn't just for show – this distribution has seen increases for an impressive 25 years straight. What's more, it's supported by a balance sheet with an investment-grade rating, and the distributable cash flow comfortably covered the payment at a solid 1.7 times in 2023. Admittedly, the yield is likely to account for the lion's share of your returns, but for those looking to maximize their income stream, that's probably music to your ears.
3. Stanley Black & Decker's earnings trend is set to change direction in 2024
Toolmaker Stanley Black & Decker has faced its share of challenges over the past couple of years, making it a hard sell for investors. The impact of debt-fueled acquisitions, supply chain disruptions, and the turbulence brought on by the COVID-19 pandemic led to significant drops in earnings in both 2022 and 2023. However, the management team has been diligently working to steer the company back on course, implementing measures such as debt reduction, asset sales, and overall streamlining. Projections for 2024 indicate a turning point, with earnings expected to rebound and surpass 2023 levels.
While the industrial giant isn't completely in the clear yet, positive momentum could be the catalyst for a more favorable view from Wall Street. On top of that, this Dividend King is currently offering investors an historically high 3.6% dividend yield. For those willing to take a chance on a company in the midst of a turnaround, Stanley Black & Decker seems poised to make significant strides in terms of earnings. Time might be of the essence to get in before the broader investment community catches wind of the improving business performance.
Dividend growth, high yield, and a turnaround play
Not every investor will find all the stocks on this list appealing, as each caters to different investor preferences. Those inclined towards dividend growth may gravitate towards NextEra Energy, while yield seekers might find Enterprise more to their liking. On the other hand, investors with a bit more risk appetite, ready to dive into a turnaround narrative, might be particularly intrigued by the anticipated earnings rebound at Stanley Black & Decker.
Should you invest $1,000 in Enterprise Products Partners right now?
Before jumping into Enterprise Products Partners, it's worth noting that The Motley Fool Stock Advisor analyst team has recently highlighted their top 10 stock picks, and Enterprise Products Partners didn't make the cut. According to their analysis, these chosen stocks have the potential to generate significant returns in the years ahead.
Reflecting on the past success stories, such as Nvidia making the list back in 2005, there's a notable example. If you had invested $1,000 at the time of their recommendation, it could have grown to $567,788.