3 Dividend Stocks to Double Right Now

Investors looking for dividend stocks to buy often stop with a high dividend yield. However, a good dividend stock may not yield much, but it pays you regularly — and even better, it pays you more and more over time. This is the only real way to get income from dividend stocks. And once you understand the importance of dividend stability and growth, choosing the right stocks to buy becomes much easier. For example, few dividend stocks look so compelling that you’d want to double down on them right now. Here are three to get you started.

Big growth plans to increase dividends

My top stock pick for income investors today is NextEra Energy (NO -0.10%). It’s a dividend powerhouse, with a growing payout year over year supported by earnings growth. Of course, NextEra Energy’s incredible positioning in two big industries helps.

NextEra Energy owns and operates the largest US utility, Florida Power & Light Company (FPL). It is also the largest producer of wind and solar power and a leading player in energy storage. So while its utilities business generates steady earnings and cash flow, clean energy is the company’s growth engine. Combined, the two businesses allow NextEra Energy to pay a steady and growing dividend — it has grown its dividend at a compound annual growth rate (CAGR) of nearly 10% over the past 20 years, driven by growth of about 9% of adjusted earnings per share (EPS).

NextEra Energy expects to grow adjusted EPS by 6% to 8% through 2027 and believes it should be able to increase its annual dividend by about 10% through 2026. The company plans to pump in between $65 billion and $70 billion only in its renewables business. the next four years and that’s where earnings and dividend growth should come from. So even if NextEra Energy’s 2.8% yield doesn’t appeal to you much, the stock’s regular dividend hikes could still yield nice returns.

A solid dividend king

You might be surprised to see an industrial stock yielding 1.2% on a list of dividend stocks to double down on, but you’d be even more surprised once you know what incredible dividend stocks PARKER HANNIFIN, (Ph 0.30%) it is. Parker-Hannifin is a dividend king with a 68-year track record of annual dividend growth. Its dividend has also grown at an impressive CAGR of 14% between 2019 and 2024. This is one of the strongest dividend profiles we’ve seen in some time.

What is the key to Parker-Hannifin’s dividend history? Parker-Hannifin is a leader in motion and control technologies and manufactures a broad set of products in hydraulics, filtration, pneumatics and more. Its most important market is aerospace and defense, but it also serves transportation, industrial equipment, off-highway and energy customers. Parker-Hannifin has grown steadily in recent years through acquisitions and a greater focus on products with a longer life cycle that will follow secular trends such as electrification and digitization.

PH data by YCharts

Parker-Hannifin shares are up more than 200% over the past five years. Here’s why the stock is still an incredible buy: The company expects to grow its free cash flow by 50% and double its dividend over the next five years. This should mean higher dividends for shareholders year on year, all of which should also be reflected in the share price.

Market fear is a buy signal

In its most recent letter to shareholders, Brookfield Renewables (BEPC -1.00%) (BEP -0.49%) called itself “a key driver of one of the most significant growth trends in recent history”. It was about digitization, artificial intelligence and cloud computing. No, Brookfield Renewable is not a technology company — it’s a renewable energy company.

The point is that the demand for sustainable electricity, and therefore clean energy, should increase with global digitization and the construction of data centers. Brookfield Renewable should be a key beneficiary as it is one of the largest publicly traded renewable energy companies in the world and nearly 40% of its development pipeline is outside the US, spread across Europe, Asia-Pacific and the Americas south. The company recently signed a landmark agreement with the tech giant Microsoft to provide more than 10.5 gigawatts of new renewable energy capacity between 2026 and 2030 to support its cloud services.

In short, there are massive growth opportunities for Brookfield Renewable. The company is already growing steadily, with its funds from operations (FFO) per unit growing at a 12% CAGR between 2016 and 2023 and dividends growing at a rate of 6% over the past two decades. This dividend growth has made patient investors a lot of money in stocks.

BEP data by YCharts

Brookfield Renewable expects to invest $7 billion to $8 billion in growth over the next five years and is targeting at least 10% annual FFO and dividend growth of 5% to 9% through 2028. Combine that with a yield of 5% more and Brookfield Renewable Stocks can bring you double-digit annualized returns. It’s an opportune time to buy, with shares of both the corporation and the partnership down double digits over the past year or so. US investors may want to buy corporate stock, however, to avoid filing a K-1 tax form and withholding foreign tax.