These companies consistently provide robust and steadily increasing dividends.
Renowned investing icon Warren Buffett emphasizes the importance of a long-term investment approach, famously stating that his preferred holding period is “forever.” I strive to adopt a similar philosophy, particularly when it pertains to dividend stocks. My goal is to acquire and retain shares in companies that I am confident will offer me a lifetime of passive income through dividends.
Below are three exceptional dividend stocks that I have no intentions of selling.
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1. Invest in Brookfield Renewable for Sustainable Growth
Brookfield Renewable (BEPC -1.02%) (BEP -0.58%) stands out as a premier global provider of renewable power and decarbonization solutions. With its diverse portfolio of hydroelectric, wind, and solar energy assets, Brookfield is well-positioned to generate stable and increasing cash flows over time.
Currently, Brookfield sells nearly 90% of the electricity it produces through long-term power purchase agreements (PPAs) with utilities and large corporate entities, with an average remaining term of 14 years. Many of these agreements are indexed to inflation, which constitutes about 70% of its revenue. This strategic approach allows Brookfield to generate predictable and steadily increasing cash flows, thereby supporting its attractive high-yield dividend currently at 4.4%.
The company anticipates that inflation-driven rate increases will facilitate growth in its funds from operations (FFO) per share at an annual rate of approximately 2%-3%. Furthermore, as power prices—especially from renewable sources—outpace inflation, Brookfield is optimistic about securing even higher rates as legacy PPAs reach expiration and new contracts are signed at elevated market rates. These margin-enhancing strategies are projected to contribute an additional 2% to 4% to its FFO per share each year.
Brookfield is also strategically addressing the increasing demand for clean energy by expanding its renewable energy capacity. With a substantial backlog of projects, the company believes it can add another 4% to 6% to its FFO per share annually by developing new renewable power initiatives.
Moreover, Brookfield regularly acquires renewable energy platforms, further bolstering its growth potential. The company is projecting FFO per share growth exceeding 10% annually in the long term, which supports its objective to increase dividends between 5% and 9% each year. Since 2001, Brookfield has achieved a compound annual growth rate of 6% in its dividend payout.
2. Maximize Returns with Invitation Homes in Real Estate
Invitation Homes (INVH 1.21%) operates as a real estate investment trust (REIT) dedicated to owning and managing single-family rental properties. The company boasts a portfolio of over 110,000 homes spread across 16 prime housing markets, strategically targeting metropolitan areas characterized by strong employment and population growth—two crucial factors driving housing demand.
The robust demand for rental properties ensures high occupancy rates throughout its portfolio while fostering healthy rent growth. Since its initial public offering in 2017, Invitation Homes’ same-store net operating income has increased at an impressive annual rate of 6.1%. This steady income stream underpins its current dividend yield of 3.8%.
To further accelerate growth in FFO per share, Invitation Homes consistently seeks out additional rental properties. The REIT actively purchases homes on the open market, acquires portfolios from other investors, and engages directly with builders to acquire new homes. Currently, Invitation Homes has over 1,800 homes under contract from leading homebuilders. The key drivers of its growth—portfolio expansion, rent increases, and an expanding third-party management platform—position the REIT to continue raising its dividends, a practice it has maintained every year since becoming publicly traded.
3. Discover Reliable Income with Realty Income
Realty Income (O 1.07%) represents another REIT, albeit with a different focus. It invests in a diverse array of commercial real estate, including retail, industrial, and gaming properties, secured by long-term net leases with many of the world’s leading corporations. These net leases create a stable rental income stream as tenants are responsible for all operating costs, thus ensuring exceptionally steady cash flow to maintain its monthly dividend, which currently yields 5.6%.
The REIT aims to distribute about 75% of its adjusted FFO as dividends while retaining the remainder to fund new income-generating investments. Realty Income is also recognized for having one of the most robust balance sheets in the REIT sector, which allows it to grow its portfolio consistently.
Realty Income’s continuously expanding portfolio has enabled the REIT to routinely increase its dividend payments. The company has successfully raised its dividend 131 times since its public market debut in 1994, including a remarkable streak of increasing dividends for the past 111 consecutive quarters.
Consider Investing in Forever Income Stocks for Long-Term Stability
Brookfield Renewable, Invitation Homes, and Realty Income align seamlessly with my dividend investing strategy. Their strong financial profiles combined with consistent dividend growth promise to provide me with a sustainable and increasing income stream. This combination of reliability and growth is the primary reason I have no plans to divest these exceptional dividend stocks.
Matt DiLallo has positions in Brookfield Renewable, Brookfield Renewable Partners, Invitation Homes, and Realty Income. The Motley Fool has positions in and recommends Invitation Homes and Realty Income. The Motley Fool recommends Brookfield Renewable and Brookfield Renewable Partners. The Motley Fool has a disclosure policy.
