Investing in Dividend-Producing Stocks for Retirement? Check Out These Top Three High-Yield Options.
High-Yield Dividend Stocks: Black Hills, MPLX, and Brookfield Renewable
In the world of high-yield dividend stocks, three names have been making waves among investors – Black Hills Corporation (BKH), MPLX LP, and Brookfield Renewable Partners.
Black Hills Corporation
Led by CEO David L. Goodin, headquartered in Rapid City, South Dakota, Black Hills is a regulated natural gas and electric utility company. With a market cap significantly smaller than utility giant NextEra Energy, the company has managed to attract attention with its Dividend King status, having increased its dividends for 55 consecutive years. The current yield stands at a respectable 4.3%, with the dividend likely to remain geared toward growth.
In a move to bolster its growth trajectory, Black Hills has agreed to merge with Northwestern Energy, creating a combined entity nearly twice as large. The deal, expected to close in the second half of 2023, will provide Black Hills with a faster growth path.
MPLX LP
MPLX, headed by CEO Robert L. Mullen in Findlay, Ohio, is a midstream energy company with a broad array of expansion projects under construction, scheduled to enter commercial service through 2029. The company ended the first half of this year on a strong note, with a low 3.1 times leverage ratio and over $2.9 billion in distributable cash flow generated through the first six months.
MPLX's dividend, currently yielding over 7.5%, has been on a growth spree. Since its formation in 2012, the company has increased its payout every year, growing it at a compound annual rate of 10.7% since 2021. The company has also returned additional value to investors, repurchasing $200 million worth of units.
Brookfield Renewable Partners
Based in Toronto, Ontario, Canada, Brookfield Renewable Partners is a leading renewable power company. Under the leadership of CEO Connor Teskey, the company has a strong track record of dividend growth, having increased its dividend every year since 2001, growing it by a compound annual rate of 6%. Brookfield Renewable's dividends are backed by a 11% compound annual growth rate of funds from operations (FFO) per unit.
The company expects to grow its annual FFO per unit by over 10% through the next decade and its annual dividend per share by 5% to 9%. Brookfield Renewable corporate shares (BEPC) yield a solid 4.5%, providing investors in the U.S. with the advantage of avoiding K-1 tax forms and foreign tax withholding.
Addressing Retirement Shortfalls
As the average American household faces a projected retirement shortfall of more than 30% between Social Security and personal savings, high-yield dividend stocks like Black Hills, MPLX, and Brookfield Renewable could play a crucial role in bridging this gap. With their steady dividend growth and attractive yields, these companies offer a reliable source of income for future retirees.
