Investing in stocks that steadily increase their dividend payments can be a solid strategy for generating substantial income over the long term. Companies that steadily hike their dividends mostly have strong financials, and these higher payouts reflect management’s confidence in future earnings and dedication to rewarding shareholders. Additionally, reinvesting dividends can significantly boost returns over time, making dividend-growth investing a powerful strategy.
Among the many dividend-paying stocks in the market, Brookfield Renewable Partners (BEP) and Altria (MO) stand out for their impressive track record of dividend payments and growth.
Both companies currently offer attractive yields near 7%, making them particularly appealing to income investors. What makes these stocks even more compelling is their ability to maintain and potentially increase dividends in the future, thanks to their resilient earnings and strong business models. Let’s take a closer look at why these high-yield dividend stocks are worth considering.
Dividend Stock #1: Brookfield Renewable
Brookfield Renewable Partners (BEP) is one of the compelling stocks to earn steady dividend income. This leading player in clean energy owns and operates a diverse portfolio of sustainable assets, including hydroelectric, wind, utility-scale solar, energy storage, and distributed generation.
The company’s ability to generate stable, derisked cash flows allows it to consistently increase dividends over time. In fact, since 2001, the company has grown its dividend at an impressive compound annual growth rate (CAGR) of 6%. Looking ahead, Brookfield is poised to deliver 12% to 15% growth annually in the long term, which includes a consistent dividend hike.
Brookfield Renewable is not just about dividends. The company is well-positioned to deliver solid growth led by higher demand for clean energy. Notably, the combination of internally generated cash flows, asset recycling, and strategic financing will enable Brookfield Renewable to develop new projects and acquire additional assets, further strengthening its revenue streams.
Additionally, long-term power purchase agreements and inflation escalations embedded in its contracts augur well for growth. The company will also benefit from its cost-reduction initiatives, which will help expand its future cash flow.
Further, Brookfield Renewable has a strong competitive advantage over its peers thanks to its scale, global presence, and high-quality assets. Compared to other companies in the space, Brookfield has a large development pipeline, giving it a unique edge in securing high-value projects.
As demand for electricity surges, driven by the rise of digitalization, electrification, and net-zero targets, renewables have become the most cost-effective and scalable solution for meeting global energy needs. Brookfield is well-positioned to capitalize on this trend with its expansive portfolio. All these factors mean investors can expect dividend growth and capital appreciation over time.
Brookfield Renewable offers a high forward yield of 6.9%, making it one of the most attractive dividend stocks.
Wall Street analysts are also bullish on BEP stock, with a consensus “Strong Buy” rating.
Dividend Stock #2: Altria
Altria (MO) is one of the most dependable high-yield dividend stocks, offering investors a consistent income stream backed by a strong business model. The company's diversified product portfolio, pricing power, and operational efficiency provide a solid foundation for sustained profitability, supporting higher dividend payouts.
Notably, Altria has consistently returned cash to its shareholders. In 2024, the company increased its dividend by 4.1%, marking the 59th dividend hike in the past 55 years. With a solid earnings base and strategic growth initiatives, Altria appears well-positioned to continue its tradition of dividend increases in the coming years.
The company’s smokable products are a primary driver of its profitability and will support Altria’s future payouts. Moreover, the company is diversifying its revenue streams by expanding into smoke-free alternatives and extending its footprint in international markets, particularly in oral, heated, and e-vapor segments.
Financially, Altria is on solid ground. Its strong balance sheet, ample liquidity, and cost-saving initiatives position the company well to manage its debt obligations while maintaining attractive shareholder returns. Altria forecasts an annual mid-single-digit growth in earnings per share (EPS) through 2028. This expected earnings growth is likely to support continued mid-single-digit increases in dividend payouts, reinforcing its appeal to income-focused investors.
Efficiency improvements are also a priority for Altria. Initiatives like centralized operations, AI integration, and outsourcing aim to unlock $600 million in cost savings over the next five years. These savings will fuel investments in high-potential growth areas, further enhancing shareholder value.
While analysts have a “Hold” consensus rating, Altria’s attractive forward yield of 7.1% and its long-standing commitment to dividend growth make it a worry-free stock to generate steady income.
