3 dividend-paying stocks I would buy now without any hesitation
Chip and Dan Heath have written a great book called Decisive years ago to make better decisions. One of the key steps the brothers discussed was taking some distance before making a final decision on something important. In other words, stop and think about it before you act.
This recommendation is almost always a smart thing to do when buying stocks. However, there are stocks with fantastic underlying companies that pay attractive dividends that I wouldn’t have to think about before picking up. Here are three dividend-paying stocks that I would buy now without any hesitation.
Brookfield Renewable Power
It is pretty much a given that renewable energies will benefit from greater demand in the future. Countries and big companies are scrambling to reduce their carbon emissions.
Brookfield Renewable Power (NYSE: BEP) (NYSE: BEPC) stands out as one of the world’s leading suppliers of renewable energy. The company operates hydroelectric, wind, solar and storage facilities in North and South America, Europe and Asia.
It’s not just another boring utility stock. Brookfield Renewable has generated an annualized total return of almost 18% over the past two decades. He expects to generate annual returns of around 15% over the long term. The stock could easily outperform the overall market for years to come.
Part of the appeal of Brookfield Renewables is its high dividend. Its dividend yield is close to 3% (somewhat higher for limited partnership shares traded under the BEP ticker and slightly lower for shares of companies traded under the BEPC ticker). The company has increased its distribution by a compound annual growth rate of 6% since 2000.
Eastern Government Properties
What is the biggest risk for a real estate investment trust (REIT)? The possibility that its tenants cannot pay. However, there is one REIT that doesn’t have to worry about this scenario – Eastern Government Properties (NYSE: DEA).
As the name suggests, Easterly owns and leases properties from government agencies. For Easterly, that means federal agencies. All but two of its 82 properties currently held are leased to the US government.
Easterly continues to add new properties, however. The company recently upped its full-year profit forecast due to what CEO William Trimble called “an increasingly solid pipeline of exploitable acquisition opportunities.”
As a REIT, Easterly must remit at least 90% of its taxable income to shareholders as dividends. Higher profits therefore lead to higher dividend payouts. This is all the more interesting as the Easterly dividend is already yielding 4.9%.
Innovative industrial properties
Imagine if you could buy a stock that operates in a high growth market that is also a REIT with a high dividend. You don’t need to use your imagination with Innovative industrial properties (NYSE: IIPR).
IIP is the leading provider of real estate capital for the medical cannabis industry. The niche of the business is sale-leaseback operations. In these deals, a medical cannabis operator sells property to IIP, which then leases the property to the operator.
As of July 6, 2021, IIP owned 72 properties in 18 states. At the end of 2020, she owned 66 properties. The REIT’s ‘flush and repeat’ strategy of adding new properties has allowed it to grow revenues by over 1,000% over the past three years, with profits skyrocketing by over $ 1. 500%. With the expansion of the US medical cannabis market, I believe that IIP can continue its momentum.
At first glance, IIP’s 2.8% dividend yield may look good, but not great. However, the company has quadrupled its dividend in the past three years. The yield is not higher for one simple reason: the IIP share price has climbed even more than its dividend. It’s the kind of dividend-paying stocks you can buy without thinking twice.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.