In a climate where major stock indices are reaching new heights, sourcing stocks that offer attractive dividend yields isn’t as straightforward as it once was. That said, investors looking for lucrative options should explore Brookfield Renewable Partners (NYSE: BEP), Royalty Pharma (NASDAQ: RPRX), and Bristol Myers Squibb (NYSE: BMY).
Since 2020, these three companies have notably raised their quarterly dividends between 22.7% to 40%. Surprisingly, despite these increases, their stock prices have significantly dropped from their peak values observed in 2021.
Brookfield Renewable Partners
For those seeking steady dividend growth, Brookfield Renewable is a standout choice. This utility company prioritizes renewable energy sources, focusing on hydroelectric, wind, solar, and nuclear power, rather than traditional fossil fuels. Currently, it boasts an impressive dividend yield of 5.4%, which is more than four times the average yield seen in S&P 500 dividend stocks. Even though its stock has dipped approximately 37% from past highs, its dividends have grown by around 22.7% since 2020.
Investors are particularly drawn to Brookfield Renewable due to long-term contracts with customers that generally include inflation-linked rate adjustments. Notably, in the second quarter, the company signed agreements to provide an additional 2,700 gigawatt hours of power annually, with a substantial portion contracted to corporate buyers. This positions Brookfield for sustained growth amid an ongoing demand shift towards cleaner energy solutions.
Royalty Pharma
As prescription drug spending continues its upward trajectory—with Americans spending $405 billion in 2022 alone, accounting for an 8.4% increase compared to the previous year—Royalty Pharma offers a robust way to capitalize on this trend. Holding financial interests in over 35 commercial-stage drugs, Royalty Pharma is a safer bet for capturing rising healthcare expenditure.
Despite its stock falling roughly 38% from its all-time peak in 2021, the company has elevated its dividend payments by 40% since 2020, resulting in a current yield of 3%. Recent performance metrics reveal a substantial 11% year-over-year jump in royalty receipts for the second quarter, with projections indicating receipts could exceed $2.7 billion for the year, marking a 9% improvement compared to 2022. With approximately $2 billion in new transactions announced in the first half of the year, Royalty Pharma is poised for future growth.
Bristol Myers Squibb
Bristol Myers Squibb, a long-standing player in the pharmaceutical industry, has seen its shares decline by about 39.4% from previous peaks. However, this decline has not deterred the company from increasing its dividends every year since 2009. Its robust R&D pipeline, which includes five recently launched drugs displaying a growth of over 10% year over year, continues to drive potential for further dividend hikes.
The company’s recent FDA approvals for three innovative cancer treatments highlight its ability to respond to market needs effectively. Moreover, anticipated approval for the groundbreaking anti-psychotic drug KarXT could yield significant sales, projected to top $10 billion annually at peak performance. With a 46% increase in quarterly dividend payouts since 2019, Bristol Myers Squibb’s current yield sits at a competitive 4.9%. The company’s capabilities to innovate, coupled with its commitment to rewarding shareholders, makes it a potential long-term investment.
Conclusion
While the market may be characterized by lofty valuations, the dynamics surrounding these three dividend-paying stocks present a tantalizing opportunity for investors looking for reliable sources of passive income. Each company possesses a distinct advantage in its respective sector—be it renewable energy, pharmaceuticals, or biotechnology—coupled with a strong history of dividend growth. For those considering a $1,000 investment in Brookfield Renewable Partners or similar stocks, the potential for income generation and capital appreciation over the long haul is undeniably compelling.
Given the increasingly competitive landscape of finance and investment, these dividend stocks — Brookfield Renewable, Royalty Pharma, and Bristol Myers Squibb — are noteworthy contenders that could offer both resilience and reward in the years to come.