“Despite a strong first half for the broader market, dividend stocks didn’t fare as well. The Dow Jones US Dividend 100 Index, tracking top dividend stocks, saw only a modest 2% rise. As a result, many high-quality dividend stocks are currently appearing attractive to investors.
Enbridge (NYSE: ENB), Brookfield Infrastructure (NYSE: BIPC)(NYSE: BIP), and Brookfield Renewable (NYSE: BEPC)(NYSE: BEP) have caught the attention of several contributors at Fool.com as standout dividend stock picks. Here’s why these stocks could deliver robust total returns in the latter half of the year and beyond.
Enbridge is poised for significant portfolio changes in 2024. The company is acquiring three regulated natural gas utilities from Dominion Energy, transactions expected to conclude by year-end. This move will elevate Enbridge’s natural gas utility exposure from 12% to 22% of its earnings before interest, taxes, depreciation, and amortization (EBITDA), thereby reducing reliance on oil pipelines from 57% to 50%.
This strategic shift aligns with Enbridge’s long-term goal to adapt to increasing demand for cleaner energy sources. Despite concerns about increased debt from the acquisitions, Enbridge benefits from reliable cash flows derived from fee-based, regulated, and contract-driven income streams, enabling it to manage additional leverage effectively.
The acquisitions also bolster Enbridge’s portfolio with more regulated utility assets known for their stable capital investment and return profiles, laying the groundwork for steady future growth.
Moreover, Enbridge boasts an impressive track record of 29 consecutive years of dividend increases. While the dividend yield remains a significant component of total return, steady dividend growth could potentially enhance the total return to around 10%.
Investors may find the current period opportune to secure this high-yield stock, as the anticipated completion of transformative acquisitions in 2024 could shift market sentiment positively toward Enbridge.
Meanwhile, Brookfield Infrastructure’s stock performance during the first half of 2024 was lackluster, with a 4% decline contrasting sharply with the S&P 500’s robust gains. This divergence in performance presents a compelling opportunity for savvy investors.”
