For the most part, the bulk of the return from a high-yield stock tends to come from dividend income. However, some high-yield dividend stocks provide the best of both worlds. They deliver income and solid price appreciation as they grow their earnings and dividends.
Here are three high-yielding energy stocks to buy for income and hold for long-term capital gains.
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Brookfield Renewable
Brookfield Renewable (BEPC 0.85%)(BEP 1.01%) yields more than 4%. That’s well above the S&P 500’s current yield of around 1.1%. The leading global renewable energy company has increased its high-yielding payout by at least 5% each year since 2011.
Brookfield expects to grow its dividend by 5% to 9% annually going forward. It should have plenty of power to achieve that plan. Brookfield expects to grow its funds from operations at a rate of more than 10% annually through 2031. Several catalysts drive that view, including inflation-linked rate increases, new renewable energy development projects, and acquisitions. Brookfield has a vast development pipeline underway and recently agreed to buy Boralex to strengthen its portfolio and growth prospects.
Today’s Change
(-0.85%) $-0.31
Current Price
$36.32
Key Data Points
Market Cap
$6.6B
Day’s Range
$36.32 – $36.99
52wk Range
$31.19 – $45.18
Volume
67.6K
Avg Vol
1.5M
Gross Margin
25.25%
Dividend Yield
4.21%
The company’s combination of yield and growth positions it to deliver total annualized returns in the 12%-15% range. That’s a robust return from a high-yield stock.
ExxonMobil
ExxonMobil’s (XOM +0.67%) dividend currently yields almost 3%. The global oil giant has increased its dividend payment for 43 consecutive years. Less than 5% of S&P 500 companies have achieved that milestone.
The oil company expects to deliver $25 billion in earnings growth and $35 billion in free cash flow growth by 2030, at constant prices and margins relative to 2024. That implies 13% average annual earnings growth and double-digit free cash flow growth, with even higher per-share growth due to its share repurchase program. ExxonMobil expects to generate about $145 billion in cumulative surplus cash at $65 oil. Its robust cash flows support its plan to repurchase $20 billion of its shares this year.
Today’s Change
(0.67%) $0.94
Current Price
$141.86
Key Data Points
Market Cap
$588B
Day’s Range
$139.98 – $142.15
52wk Range
$105.53 – $176.41
Volume
12.7K
Avg Vol
19.8M
Gross Margin
20.92%
Dividend Yield
2.88%
Exxon’s double-digit annual earnings-per-share growth rate should support continued dividend increases and high-octane gains over the next five years.
Williams
Williams (WMB 0.18%) also offers a nearly 3% yield. The natural gas infrastructure giant has paid a dividend for 53 consecutive years. While Williams hasn’t increased its dividend every year, it has grown the payout at a 5% compound annual rate since 2020.
The pipeline giant is entering an accelerated growth phase. Demand for natural gas is surging to help power AI data centers. Williams is capitalizing on this catalyst by investing to expand its gas pipeline infrastructure and build gas power innovation projects. It’s currently investing over $7 billion across four integrated power innovation projects, including gas supply, pipelines, and power generation. Additionally, it’s supporting growing liquified natural gas (LNG) demand through new pipelines and a $1.9 billion direct investment in Louisiana LNG and the associated Driftwood Pipeline.
Today’s Change
(-0.18%) $-0.13
Current Price
$71.36
Key Data Points
Market Cap
$87B
Day’s Range
$70.79 – $71.71
52wk Range
$55.82 – $80.08
Volume
269.1K
Avg Vol
6.3M
Gross Margin
43.17%
Dividend Yield
2.87%
Williams’ robust gas infrastructure backlog supports its expectations of growing earnings at a rate of more than 10% annually through 2030. That’s an acceleration from its 5% to 7% historical growth target. The company’s strong growth rate should give Williams plenty of fuel to continue increasing its dividend while driving strong stock price gains.
Lots of income and plenty of gains, too
Brookfield Renewable, ExxonMobil, and Williams aren’t your typical high-yielding dividend stocks. They all expect to grow their earnings at a double-digit annual rate in the coming years. That should support continued dividend increases and healthy gains in their stock prices. Their strong total return potential makes them ideal high-yield dividend stocks to buy and hold for the long term.
Matt DiLallo has positions in Brookfield Renewable and Brookfield Renewable Partners. The Motley Fool recommends Brookfield Renewable and Brookfield Renewable Partners. The Motley Fool has a disclosure policy.
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