Some companies have a knack for making their investors richer. They operate highly profitable businesses, which gives them enough cash to finance their growth while returning money to investors.
Brookfield Renewable (NYSE: BEPC)(NYSE:BEP) And Prologis (NYSE: PLD) are proven wealth creators. They are in an excellent position to continue to enrich their investors in the future. That makes These are great stocks to buy for those looking to grow their wealth over the next three to five years.
A powerful wealth creator
Brookfield Renewable has generated an average annual return of 15.8% total refund over the past 20 years. That is far outdated S&P500‘s average annual total return of 10.3%. In other words, the renewable energy producer has grown a $10,000 investment it made 20 years ago to more than $187,000. That’s $100,000 more than a comparable investment in one S&P500 index fund.
Brookfield’s ability to grow its earnings and dividends at healthy rates has driven these strong returns. The company has grown its resources from operations (FFO) at a compound annual rate of 12% since 2016. Meanwhile, it has increased its dividend at a compound annual rate of 6% since 2001.
The company is in an excellent position to further grow shareholder value in the coming years. Brookfield Renewable expects a trio of organic growth drivers (inflation-indexed rate increases, margin improvement activities and development projects) to drive annual FFO per share growth of 7% to 12% through 2028. already strong long term organic growth rate by signing a long-term power deal with tech titan Microsoft. Additionally, the company sees M&A activity contributing to annual FFO per share growth, pushing it into double digits.
Brookfield Renewable’s growing profits should give the company the strength to continue raising its high-yield dividend (recently around 4.5%). The company aims to increase its payout by 5% to 9% annually over the long term.
That growing dividend will provided to investors a nice income stream and basic return. Add that to double-digit earnings growth, and Brookfield Renewable could deliver total returns in the mid-teens over the next five years.
There is still a lot of growth ahead
Prologis has also done a great job of enriching its investors over the years. The industrial REIT has delivered an average annual total return of 13.6% over the past ten years. That’s past the S&P 500’s average annual total return of 13% over that period.
The REIT has grown significantly, especially in the past five years. Prologis has grown its core FFO per share at 12% annualized over the past five years, significantly faster than the S&P 500’s 7% earnings growth. It has benefited from strong rental growth, value-creating development projects and positive acquisitions. Meanwhile, the REIT has increased its dividend at a compound annual rate of 13% during that period, more than double the 5% dividend growth of companies in the S&P 500.
The leading industrial REIT expects to continue growing at one strong pace the coming years. Prologis sees organic growth drivers such as rising rents, development projects, expansion of third-party investment management and energy installations driving 9% to 11% annual growth in core FFO per share through 2026. This does not yet include the effect of acquisitions. have historically increased per share growth rates.
Those strong growth prospects put Prologis in a solid position to continue increasing its dividend by around double digits annually. With a current payout of 3.5% (more than double the S&P 500’s 1.4%), Prologis can provide a solid and rapidly increasing income stream and base yield. Add in earnings growth and it could deliver total annual returns in the low to mid teens for years to come.
Proven wealth creators
Brookfield Renewable and Prologis have a long history of enriching their investors. They have grown their profits and dividends above average, and that should continue in the future. That’s why they’re in strong take positions to get their investors right richer in the next three to five years. That makes them great stocks to buy now for your prosperity in the coming years.
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Matt DiLallo holds positions at Brookfield Renewable, Brookfield Renewable Partners and Prologis. The Motley Fool holds positions in and recommends Brookfield Renewable, Microsoft, and Prologis. The Motley Fool recommends Brookfield Renewable Partners and recommends the following options: long January 2026 $395 calls on Microsoft, long January 2026 $90 calls on Prologis, and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
2 Stocks That Could Help You Get Richer in the Next 3 to 5 Years was originally published by The Motley Fool
