With major stock indices near record highs, finding stocks that offer satisfying dividend yields isn’t as easy as it used to be. But before you give up, consider Brookfield Renewable Partners (NYSE: BEP), Royalty Pharmaceuticals (NASDAQ: RPRX)And Bristol Myers-Squibb (NYSE: BMY).
Since 2020, these three dividend payers have increased their quarterly payouts by 22.7% to 40%. Despite the increased payments, their stock prices have fallen sharply from the record highs they reached in 2021.
Rising dividend payments combined with falling stock prices are a recipe for high returns. At recent prices, these stocks offer dividend yields that are well above average. That’s why investors can expect steadily rising payouts from these three exceptional stocks over the next 10 years.
Brookfield Renewable Partners
If you’re looking for companies that can steadily increase their payouts, the utilities sector is right up your alley. Instead of focusing on fossil fuels, consider Brookfield Renewable Partners. At recent prices, it offers a dividend yield of 5.4%. That’s more than four times the average yield of dividend payers in the benchmark. S&P 500 index.
The stock is down about 37% from the highs it hit a few years ago, but its dividend payout is up about 22.7% since 2020. At recent prices, it offers a juicy 5.4% yield.
As the name suggests, Brookfield Renewable invests in hydro, wind, solar and nuclear power sources. Investors looking for a steadily growing source of income love this stock because its customers sign contracts that last decades and include inflation-adjusted rate increases.
In addition to steadily rising consumer demand for electricity, investors in Brookfield Renewable can expect steady profits driven by a long pipeline of development for business customers. In the second quarter alone, it signed agreements to supply an additional 2,700 gigawatt hours of generation per year, about 90% of which was contracted to business customers.
Royalty Pharmaceuticals
Sales of individual products can be highly unpredictable, but overall spending on prescription drugs is steadily rising. Americans will spend $405 billion on prescription drugs in 2022, up 8.4% from the previous year.
With a financial interest in more than 35 commercial products, Royalty Pharma is probably the safest way to respond to the steadily increasing demand for new medicines.
Royalty Pharma shares are down around 38% from their 2021 highs, despite the dividend payout rising 40% since 2020. At recent prices, the stock offers a dividend yield of 3%.
The recent results from this specialized financier are a lot more encouraging than you might expect from a look at the stock chart. Royalty income in the second quarter rose 11% year over year. The company expects royalty income to be at least $2.7 billion this year, or 9% more than last year.
Royalty Pharma isn’t resting on its 35 commercial products that are already generating revenue. In the first half of 2024, the company announced about $2 billion in new deals. They can’t all be success stories, but there are likely enough blockbusters in its fast-growing portfolio to keep pushing the needle forward over the next decade.
Bristol Myers-Squibb
Shares of Bristol Myers Squibb, a pharmaceutical giant that is more than a century old, have fallen about 39.4% from their peak a few years ago. The shares have fallen despite the company having raised its dividend every year since 2009.
A fast-growing portfolio will position Bristol Myers Squibb to continue to grow its dividend in the years ahead. In the first half of 2023, five drugs in Bristol Myers Squibb’s portfolio grew by more than 10% year-over-year. The company is also recording sales for three new cancer therapies that are expected to be approved by the FDA in 2024. Breyanzi is a cellular therapy for advanced lymphoma, Krazati is a targeted treatment for colorectal cancer, and Augtyro is approved to treat virtually everyone with solid tumors caused by a NTRK gene mutation.
Bristol Myers Squibb could get the green light at any moment for a long-awaited antipsychotic treatment called KarXT. If approved, it would be the first antipsychotic drug that doesn’t work on dopamine receptors. With far fewer side effects that make adhering to recommended dosing schedules a challenge, KarXT is expected to generate more than $10 billion in annual sales at its peak.
Bristol Myers Squibb’s dividend hikes over the past few years haven’t been small. The drugmaker’s quarterly payout has risen 46% since 2019. At recent prices, the stock offers a large dividend yield of 4.9%. With a slew of recently launched drugs and potential blockbusters in late-stage development, this company could continue to raise its payout for another 15 years.
Should You Invest $1,000 in Brookfield Renewable Partners Now?
Before you buy Brookfield Renewable Partners stock, you should consider the following:
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Cory Renauer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bristol Myers Squibb. The Motley Fool recommends Brookfield Renewable Partners. The Motley Fool has a disclosure policy.
3 High Yield Dividend Stocks Down Over 39% to Buy Now and Hold for at Least 10 Years was originally published by The Motley Fool
