3 5% Dividend Stocks to Buy Right Now for Passive Income

Investing in dividend stocks can be a fantastic way to generate passive income. Many high-quality companies offer higher yield payouts. Additionally, several of these top income producers are consistently increasing their payouts annualmaking them better than the fixed income you could earn from a bond.

Brookfield Renewables (BEPC 3.54%) (BEP 4.28%), Kinder Morgan (KMI 1.33%)and Vici properties (VICI 1.76%) stands out as great income stocks to buy right now. All offer dividend yields of at least 5%, putting them several times higher than that S&P 500 dividend yield below 1.5%. Meanwhile, they have solid records of increasing payouts every year, which it seems very likely to continue.

A strong income stream

Brookfield Renewable is one of the world’s leading producers of renewable energy. It has a globally diversified portfolio of hydro, wind and solar power assets that generate clean electricity. It sells that power to utilities and large corporate buyers under long-term power purchase agreements. Those contracts supplies the company with stable and growing income (70% link power rates to inflation).

The company pays a reasonable amount of stable cash flow to support its high dividend yield (less than 75% of funds from operations (FFO) in the first half of this year). This gives it a nice cushion while allowing it to retain cash to help fund new investments. Brookfield Renewable has as well a strong investment grade balance sheet.

The major renewable energy company expects to grow its FFO per share by more than 10% annually through at least 2028. is a combination of inflation-related rate increases, margin improvement activities, development projects and acquisitions. These catalysts should give it enough strength to meet its plan to increase its dividend by 5% to 9% each year. Brookfield has increased its payout by at least 5% for 13 Justice years.

Many of fuel to increase this with high efficiency dividend

Kinder Morgan operates the largest gas pipeline network in North America and other energy infrastructure assets. These businesses generate a very stable cash flow. About 68% comes from take-or-pay and hedging contracts, meaning it is paid a set amount regardless of volumes and market price. Fee-based deals (fixed-price contracts with variable volumes) still comprise 27% of its earnings mix, leaving just 5% of its earnings exposed to commodity prices.

The pipeline giant is paying little more than half of its stable cash flow in dividends, keeping the rest to fund expansion projects, buy back shares and maintain a strong balance sheet. The company currently has $5.2 billion in expansion projects under construction, with half expected to be operational by the end of next year and provide near-term revenue growth. Kinder Morgan can supplement its solid organic growth rate with increased acquisitions.

The company’s growing cash flows should give him the fuel to continue increasing its dividend. It posted its seventh consecutive annual dividend increase earlier this year.

A low-risk bet on a growing revenue stream

Vici Properties is a real estate investment trust (REIT) focused on ownership experiential properties such as gaming, hospitality and entertainment destinations. Lease these properties back to long-term operators net leasing. Those leases provide it with predictable cash flow that grows over time because of contractual rent escalation clauses.

The REIT pays out about 75% of its stable rental income in dividends. Keep the rest to help fund new income-generating real estate investments. It also has a strong balance sheet, giving it additional flexibility to make new investments.

Vici Properties has several growth drivers besides rising rents. It will acquire experiential properties in sale-leaseback transactions with operators, buy properties from other investors and even acquire rival REITs. In addition, it provides partners with financing for development and expansion projects, which can open the door to future property acquisitions.

The company’s growing cash flow helps support a steadily growing dividend. Vici Properties has increased its payout in all six years since going public, growing its dividend at a peer-leading 7.9% compounded annual rate.

Top Income Stocks

Brookfield Renewable, Kinder Morgan and Vici Properties offer high-yielding dividends that have grown steadily over the years. With strong financial profiles and solid growth prospects, these upward trends should continue. That makes them great stocks to buy right now for passive income.