Dividend Investing Hasn’t Been This Exciting In Some Time: 3 Stocks to Buy Immediately

If you’re hunting for dividend stocks that deliver killer total returns over the long haul, there are plenty of opportunities to consider right now. Even though risks appear to be proliferating in certain corners of the market, there are still some opportunities among previously less-favored sectors I’d argue could be poised for more significant upside in the near to medium term. 

The three stocks I’m going to highlight in this piece provide healthy dividend yields, supported by rock solid balance sheets and impressive cash flow generation capabilities. With that in mind, let’s dive into why these particular names may be worth considering as immediate investments to take advantage of the market-wide shifts we’re seeing right now. 

Enbridge (ENB)

Enbridge dominates North American energy infrastructure with over 70 years of uninterrupted dividends and 31 straight years of hikes. With this dividend aristocrat still providing a dividend yield in the mid-5% range, investors can lock in that yield today and enjoy the sort of 3% or so annual dividend increases the company has put forward for the foreseeable future. 

As a major pipeline operator, Enbridge’s cash flow profile is among the best in the energy sector. Its revenue and earnings are tied to long-term volume contracts which don’t see the kind of volatility other companies experience courtesy of commodity price swings. Thus, this is one of the most defensive dividend stocks in the energy sector, at least in my view. 

Now, Enbridge’s payout ratio is above 100%, so there is some risk here. However, the company’s management team has been focused on paying down its debt, and increasing its operating effiency to boost cash flow. If those endeavors continue to bear fruit, the company’s record volumes this past quarter and surging demand for energy overall could lead to a much better balance sheet position a few years down the line. 

Thus, investors thinking long-term do have an excellent option to consider in ENB stock right now. 

Fortis (FTS)

Another top Canada-based company, Fortis (NYSE:FTS) is a utility company with millions of customers located in Eastern Canada, the U.S. and the Caribbean. 

This is a company, like all utility giants, that’s benefiting in a big way from secular and structural tailwinds. I think most readers are well aware of the AI buildout, and what that will mean for energy demand (and pricing power/future cash flows for utility providers). As we see more and more emphasis being placed on companies with durable cash flows and sustainable business models (can’t turn the lights or heat off), I think Fortis and other utility giants will continue to catch a bid.

What I like most about Fortis, though, is the company’s dividend growth track record. Raising its distribution for more than five decades straight, this is a company that knows how to reward shareholders well. And with expectations that the company should be able to deliver dividend increases in the 6-7% range for the next five years, this is a stock I think investors may want to consider buying right now and locking in its current 3.3% yield. 

Prudential Financial (PRU)

Prudential (NYSE:PRU) is among the leading life insurance and wealth management giants I think many in the market are overlooking right now.

With a dividend yield of 5.4% and a long history of raising its distribution over time as well, there’s a similar dividend growth story available to investors looking to pick up shares of this blue-chip stock. 

The company’s pristine payout ratio, which has hovered around 40% for some time, suggests that this current distribution is well covered. In combination with rising earnings (EPS surged more than 22% year-over-year this past quarter amid strong retirement and annuity sales), I think there’s a lot to like about Prudential’s outlook moving forward.

As future interest rate cuts boost book value and cash flows (thanks to longer-duration assets bought in recent years providing a boost to the company’s overall portfolio), this is a stock I think should provide excellent value as a way to play disinflation trends.