3 Can’t-Miss Dividend Stocks to Buy Hand Over Fist in September

Dividend stocks can be fantastic investments. Historically, as a class, they have outperformed average stocks with less volatility than the broader market. The best performers were companies that routinely increase their dividends.

Brookfield Renewables (BEPC 3.42%) (BEP 2.64%), Williams (WMB -0.47%)and Chevron (CVX -0.25%) they have a history of solid dividend growth. Their reliability on this point is one of the many factors that make them stand out to several Fool.com contributors as they can’t miss dividend stocks to buy this month.

Brookfield Renewable is in the right place

Reuben Gregg Brewer (Brookfield Renewable): There are two ways to invest in Brookfield Renewable — through a corporate share class that has a dividend yield of about 5 percent or a partnership unit that has a more attractive 5.6 percent yield. Both represent the same entity, but have slightly different tax considerations. (Partnership investing requires unitholders to file a K-1 form that’s due by April 15 each year.) That said, Brookfield Renewable’s core business is attractive.

It is sponsored by Brookfield Asset Managementa Canadian asset manager with a long and successful history of investing in infrastructure assets on a global scale. Brookfield Renewable is a way for investors to invest alongside Brookfield Asset Management in clean energy. Brookfield Renewable’s portfolio is large, spread around the world and includes hydro, solar and wind assets as well as batteries. It also has a large amount of projects in stock to keep the business and dividends growing over time.

The big story here, though, isn’t really about Brookfield Renewable — it’s about clean energy in general. The world is moving away from dirtier energy sources to cleaner ones. This will be a decades-long process that will give participating companies a long growth track. Brookfield Renewable is positioned to grow with the demand for clean energy, helped by its experienced and respected parent. And its ever-growing distribution, which has had a compound annual growth rate of 6% since 2016, is proof that investors will benefit as Brookfield Renewable grows. Consider buying now, while its yield is more than four times what you could get from a S&P 500 index fund.

Your pipeline to a growing passive income stream

Matt DiLallo (Williams): Natural gas Infrastructure giant Williams has been as reliable an income stock as they come, paying dividends for 50 consecutive years. The company has grown its payout at a compound annual rate of 6% since 2018.

The pipeline operator generates sustainable cash flows, supported by long-term contracts and government-regulated rate structures. It is expected to produce little more than $5 billion, or about $4.13 per share, on an adjusted basis funds from operations (FFO) this year. That’s enough to cover the high dividend yield (over 4% at the current share price) about 2.2 times.

Williams is keeping the rest of its cash flow to invest in expansion projects and to consolidate already excellent record. It expects to invest $1.6 billion this year and $1.8 billion in 2025 in organic expansion projects that provide growth visibility through 2027. These projects will support the company’s expectations of delivering earnings growth of 5% to 7% annually over the long term.

The company is supplementing its organic growth with increased acquisitions. Williams recently completed the $2 billion acquisition of a major natural gas storage portfolio and netted $6.1 billion in strategic transactions from 2021. Williams has broad financial flexibility to continue to make such transactions. He waits leverage ratio to be below 3.9 this year and fall to 3.6 in 2025, supporting its strong investment credit rating.

With shares trading around $45 these days, Williams is a bargain at less than 11 times adjusted FFO. That cheap price is the driving factor behind its high dividend yield. Add in the ample fuel he has to keep raising his payout, and Williams looks like a can’t-miss stock to buy for income and upside come September.

You won’t regret buying this energy stock

Neha Chamaria (Chevron): Chevron boasts a dividend track record — the oil and gas company has increased its payout for 37 consecutive years. These increases have been at an impressive pace in recent years, significantly boosting shareholder returns.

CVX data by YCharts.

The best part is that Chevron is already on track to increase its dividend further. Thanks to recent acquisitions and ongoing projects, Chevron expects its free cash flow (FCF) to grow at an average annual rate of at least 10% through 2027, assuming a Brent crude oil price of $60 per barrel. Brent crude is around $79 a barrel at the time of writing, so there is plenty of room for Chevron to grow its FCF even if oil prices fall substantially. Its FCF could grow even faster if the oil giant succeeds in the acquisition Hessas this business is expected to more than double Chevron’s FCF by 2027. Although ExxonMobil is trying to block the deal by claiming first rights to Hess’s precious oil assets, Chevron has a fair chance of winning the arbitration battle now underway.

Chevron, however, has already proven its mettle as a dividend growth stock and should continue to reward shareholders with higher dividends year after year, with or without Hess. Chevron’s production is growing steadily, its balance sheet remains strong, and management is open to growth through acquisitions as opportunities arise. This makes Chevron a compelling dividend stock to own for the long term, and with its shares losing momentum in recent weeks and trading near 52-week lows, the time is right to buy .