The average dividend yield of stocks in the S&P500 is relatively low and currently stands at 1.5%, but there are some stocks offering much more attractive coupons.
Here are three dividends with mouth-watering returns
Three dividend stocks that stand out for their high yields are energy infrastructure giant Enbridge (NYSE: ENB), REIT Medical Properties Trust (NYSE: MPW) and pipeline company, Williams Companies (NYSE: WMB).
All three companies offer dividend yields of more than 5%, well above the average of the S&P500.
Enbridge ( NYSE: ENB )
Enbridge’s dividend currently offers a yield of 7.3% and although it is well above average, the payout is very sustainable.
Enbridge generates extraordinarily stable cash flow backed by long-term contracts based on government regulated fees and commissions.
For this reason, Enbridge has minimal exposure to fluctuations in commodity prices or values.
This was evident last year as the company hit the midpoint of its full-year cash flow guidance despite significant headwinds in the energy market.
Enbridge complements its steady cash flow with a rock solid financial profile.
The group has an investment-grade credit rating and a reasonably conservative payout ratio.
As a result, Enbridge has billions of dollars of annual financial flexibility, thereby providing funds to invest in expansion projects to increase its cash flow.
The company expects the new investments to increase cash flow per share by 5% to 7% annually, which should support steady dividend increases.
This should allow Enbridge to remain an elite dividend stock and extend its 26-year streak of steady coupon hikes.
Medical Properties Trust ( NYSE: MPW )
Medical Properties Trust is a real estate investment fund that invests in healthcare facilities and currently pays a dividend with a yield of 5.3%. This payment is also on a solid basis.
The REIT generates a very stable income backed by long-term leases with high quality hospital operating companies.
Medical Properties Trust has a reasonable payout ratio and a solid balance sheet.
These factors give Medical Properties the financial flexibility to make acquisitions and expand its portfolio.
The REIT closed nearly $ 3.6 billion in new investments last year and secured another $ 1.1 billion in deals so far in 2021. This helped grow cash flow per share by 21%. last year and the Reit is back on track for double-digit growth this year.
This allowed the Medical Properties Trust to increase the payout by another 4%, with the eighth consecutive annual increase in dividends.
This REIT should have plenty of opportunities to expand its portfolio and thus to see the dividend grow over the next few years.
Williams Companies ( NYSE: WMB )
Williams Companies currently offers a dividend with a yield of 7.1%. The company supports this high-yielding payment with solid financial metrics.
Like Enbridge, Williams Companies generate very stable cash flows, supported by long-term contracts and government regulated rates.
As a result, the group posted record results in 2020, despite all the turmoil in the energy market.
Williams Companies has a solid balance sheet and generates enough cash to cover its large dividends and expansion plans.
This allowed the group to increase its dividend by another 2.5% for 2021.
William Companies is considering expanding into even cleaner fuel sources, such as renewable natural gas and hydrogen, which could fuel future growth.
For this reason, the group should have a lot of fuel to continue increasing its dividend in the coming years.
Trend-online Deputy Director, born in 1978.
After completing his studies at the Classical High School “Antonio Calamo” of Ostuni I entered the world of economics.
For about twenty years I have been dealing with Stock Exchange and Finance. After having worked as a financial promoter for several years, in 2005 I joined the Trend-online team as an editor, to later become deputy director of the cylinder head. Among other countless activities, I deal with maintaining relationships with all the experts, analysts and traders, consulted daily by Trend-online.
My motto is? “Life is like a mirror, if you look at it smiling it will smile at you”.
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