Dividend yields are negatively related to stock prices. As a result, certain top-tier dividend stocks are presently offering even more appealing passive income streams.
Brookfield Renewable stock (NYSE:BEPC), Digital Realty stock (NYSE:DLR), and Enbridge stock (NYSE:ENB) are three top dividend stocks that are down substantially and appear like terrific buys right now.
BEPC Stock: The ability to keep increasing the reward
Brookfield Renewable stocks (NYSE: BEPC) are now down 22.5% from their 2022 high. This drop has increased the company’s dividend yield to 3.8%.
That reward is built on a solid basis. The renewable energy firm earns a reasonably consistent cash flow (PPAs) by selling electricity under long-term, fixed-rate power purchase agreements. It distributed around 76% of its funds from operations (FFO) during the first half of this year, which was within range of its long-term aim of 70%. This provides some buffer while enabling it to have funds on hand to spend in its extensive development pipeline.
DLR Stock: Dividend increases are influenced by data.
Digital Realty stock (NYSE:DLR) price has dropped 44% since its peak earlier this year. Concerns about the economy slowing and affecting demand for data infrastructure have weighed on shares. The stock’s (NYSE:DLR) steep drop has increased its dividend yield to 5%.
That revenue source should continue to rise in the future. For a REIT, Digital Realty has an acceptable dividend payment ratio (75% of adjusted FFO in the second quarter). Its balance sheet is of investment-grade quality as well. These elements enable it to increase its data center portfolio via construction and acquisitions. It now has 41 development projects in the works, with half of its capacity pre-sold. Meanwhile, it has increased its African footprint by acquiring a controlling share in Teraco. These initiatives should increase its cash flow, allowing it to keep growing its dividend.
ENB Stock: The energy to continue expanding
Enbridge’s stock (NYSE: ENB) has dropped more than 20% this year. This drop has increased the energy company’s yield by more than 7%.
That massive reward is on a firm basis. Enbridge’s pipeline-utility business model delivers relatively consistent cash flow, which is supported by long-term contracts and government-regulated rate structures. Meanwhile, it distributes around 65% of those assets via dividends. This provides some buffer and enables it to save revenues for future investments.
These high-quality dividend stocks are now on offer.
Stocks of Brookfield Renewable, Digital Realty, and Enbridge have fallen more than 20% this year, owing to the stock market sell-off. As a result, their dividend yields have risen to acceptable levels. As a result, investors may lock in some enticing passive income streams that are expected to rise in the future years.
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