The stock market has been very hot over the past year, setting several new all-time highs. This may make it easier to forget about difficult times in the past.
Unfortunately, the market will eventually face more storms in the future. For this reason, investors should look for ways to protect their portfolios before future recessions. Enterprise Product Partners (NYSE: EBD), Infrastructure in Brookfield (NYSE: BIP)(NYSE: BIBC)And Brookfield Renewable (NYSE: BIP) (NYSE: BIBC) It stands out against the few Fool.com shareholders because of its resilient dividend. That's why they believe investors should buy these high-quality products, High yield stocks Before the next market downturn to add a safety net to their portfolio.
The world needs the institution
Robin Gregg Brewer (Enterprise Product Partners): The main story of Enterprise Products Partners is that it owns a huge portfolio of energy infrastructure in North America. The list of assets includes pipelines, storage, transportation and processing facilities. The intermediate business essentially helps connect the upstream (production) of the energy sector to the downstream (chemicals and refining) and the rest of the world. The North American energy sector would not succeed without companies like Enterprise.
But the key for investors is that the corporation is essentially just a toll collector, charging fees for the use of its critical energy infrastructure assets. Therefore, energy demand is more important than commodity prices that flow through the Master Limited Partnership (MLP's) system. Energy is the lifeblood of the modern world, so demand tends to remain strong even when energy prices are low or economic activity declines. In this way, Enterprise has been able to increase its dividend for 25 consecutive years despite the inherent volatility in energy prices.
Now add in the investment grade balance sheet and the fact that distributable cash flow covers the distribution by 1.7 times. There's plenty of room for bad news here before the cards are cut. And here's the best part, the distribution yield is 7.2%. Sure, yield will likely make up the lion's share of investors' returns, but if you're trying to maximize the income your portfolio generates (in good markets and bad markets), that shouldn't be a problem for you.
Designed for durability
DiLallo died (Brookfield Infrastructure): Brookfield Infrastructure produces very stable cash flow. The company operates a globally diversified portfolio of core infrastructure businesses. About 90% of its cash flows come from long-term contracts or structured frameworks with an average remaining term of 10 years. Meanwhile, 70% of its cash flows have no volume or price exposure, while another 20% have only volume risk. Finally, 85% of its profits are indexed to Or protected from inflation. These features help insulate Brookfield's earnings from future storms.
The company is working to shore up its business from future downturns by maintaining a strong financial position. Brookfield has an investment-grade balance sheet with primarily fixed-rate, long-term debt. It also enjoys abundant liquidity, which is constantly supported by strategies Capital recycling. This strategy promotes growth while maintaining financial security.
Brookfield pays investors between 60% and 70% of its stable cash flow through a dividend yield of more than 4.5%. The company expects its high-yield payouts to grow 5% to 9% annually. She has a lot of vision for her future growth. The company sees three organic drivers (increasing inflation, volume growth as the global economy expands, and growth). big capital projects backlog) resulting in 6% to 9% annual growth in its funds from operations (FFO) for each share.
The infrastructure company believes it can boost its FFO growth rate above 10% per share every year By making acquisitions financed through a capital recycling strategy. While they can make deals to enhance value in any market environment, they have a knack for taking advantage of market downturns to secure impactful investment opportunities.
Brookfield Infrastructure built a financial institution A fortress to withstand market storms. For this reason, you should have no problem providing investors with an increasing stream of dividend income in the future, regardless of what happens in the global economy.
These high-yield returns should rise steadily
Neha Chamaria (Brookfield Renewable): Brookfield Renewable (Brookfield Infrastructure's clean-energy-focused sister) is popular among income investors for two reasons: it offers a high dividend yield and backs its payout with consistent earnings growth. Not only has the renewable energy giant paid a regular dividend since its founding in 2011, but it has also increased its payout every year since. While the partnership units yield 5%, the shares of the company – which was established in 2019 – yield 4.5%.
Brookfield Renewable's dividend is bankable due to the company's business model, growth goals and commitment to shareholders. Brookfield Renewable is one of the largest publicly traded renewable energy companies in the world with a massive portfolio of assets spread across 20 countries. The company generates approximately 90% of its cash flow from long-term contracts, which simply means that it can generate stable cash flows even during difficult times. This explains why Brookfield Renewable has also been able to steadily grow its dividend and provide investors with a reliable source of passive income at all times.
To break down some numbers, Brookfield Renewable expects to grow its funds from operations per unit by 10% annually between 2023 and 2028 and its annual earnings by 5% to 9% over the long term. If the company can achieve high-single-digit earnings growth and maintain a 4%-plus dividend yield, investors could earn double-digit total annual returns from the stock. This makes Brookfield rejuvenated One of the best dividend stocks to buy nowEspecially if you're looking to add stocks that can protect your portfolio from future shocks.
Should you invest $1,000 in Enterprise Product Partners now?
Before purchasing shares in Enterprise Products Partners, consider the following:
the Motley Fool stock advisor The analyst team has just defined what they think it is Top 10 stocks For investors to buy now…and Enterprise Products Partners wasn't one of them. The 10 stocks that were discounted could deliver huge returns in the coming years.
Think when Nvidia I prepared this list on April 15, 2005… If you invested $1,000 at the time of our recommendation, You will have $740,688!*
Stock advisor It provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. the Stock advisor The service has More than four times The return of the S&P 500 since 2002*.
*Stock Advisor returns as of June 3, 2024
DiLallo died He has positions at Brookfield Infrastructure Corporation, Brookfield Infrastructure Partners, Brookfield Renewable, Brookfield Renewable Partners, and Enterprise Products Partners. Neha Chamaria He has no position in any of the stocks mentioned. Robin Gregg Brewer He has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Brookfield Renewable. The Motley Fool recommends Brookfield Infrastructure Partners, Brookfield Renewable Partners, and Enterprise Products Partners. The Motley Fool has Disclosure policy.
3 high-dividend stocks you can buy in June to protect your portfolio from future storms Originally published by The Motley Fool
