3 High-Yield Dividend Stocks That Are Huge Buys in September

High-yielding dividend stocks have underperformed in recent years. Higher interest rates have made it difficult for many.

However, that could be about to change given expectations that the Federal Reserve will start cutting interest rates soon. A few high quality ones remain, high yielding dividend stocks looking like screaming buys in September for those looking for income and growth potential. Three the best to buy this month are Kinder Morgan (KMI 0.70%), Brookfield Renewables (BEPC 0.76%) (BEP -0.35%)and Enbridge (ENB 1.57%).

Lots of gas to keep growing

Kinder Morgan currently yields over 5%. It is several times larger than S&P 500his dividend yield less than 1.5%. The main reason is Kinder Morgan’s cheap valuation.

The natural gas pipeline giant expects to generate about $2.26 per share in distributable free cash flow this year. With its recent share price of around $21.50 a piece, it is trading at less than 10 times the earnings. That’s significantly cheaper than the S&P 500 24.

Kinder Morgan could not stay so cheap for long if the Fed starts raising rates. However, this is not Kinder Morgan’s only positive catalyst. The pipeline company keeps about half of its cash flow after paying dividends, which it uses to increase shareholder value by investing in high-return capital projects, buying back shares and increasing its financial flexibility. The company currently has about $5.2 billion in high-return capital projects, half of which will come online by the end of next year. The growing cash flow from these capital projects will give it more fuel to increase its dividend, which it has done for seven years. Justice years.

Potentially strong

Brookfield Renewable currently yields around 5%. The world’s largest producer of renewable energy generates a lot of stable cash flow for paying dividends. It produced $0.96 per share of funds from operations (FFO) in the first half of this year, of which approximately 75% paid out in the form of dividends. Annualized its FFO and Brookfield trades at 15 times earnings, given its recent share price of around $28.50.

The company is very cheap compared to the wider market and its growth potential. Brookfield Renewable expects multiple catalysts to grow its FFO per share by more than 10% annually through 2028. That should give it the leverage to increase its dividend by 5% to 9% annually. The company has grown its payout at a compound annual rate of 6% over the past two decades.

Brookfield Renewable has significant long-term growth potential given the accelerating demand for energy, particularly renewable energy. The world needs to implement a unprecedented amount of electricity generation capacity over the next 20 years to power electric vehicles, homes, businesses and new technologies like AI. Market is severely underestimated this opportunity, which could fuel robust growth for Brookfield Renewable for decades to come.

The fuel to keep his streak alive

Enbridge currently produces more than 6.5%. The Canadian Pipeline and Utilities Company generates a lot of stable cash flow for paying dividends. It expects to produce about C$5.60, or $4.15, in distributable cash flow per share this year, at the midpoint of its outlook. With the price of his shares correct around $40, it trades at less than 10 times free cash flow.

The company pays outside 60% to 70% of its stable cash flow in dividends. It keeps the rest to finance expansion projects and maintain its financial flexibility. The company has a massive CA$24 billion ($17.8 billion) in capital projects currently under construction that should come online by 2028. These projects include additional oil storage and export capacity, natural gas pipelines, gas utility expansions and renewable energy projects.

Enbridge expects a combination of expansion projects, cost savings and optimizations and acquisitions to fuel annual per-share cash flow growth of 3% through 2026 and 5% per year thereafter. This should give the company the fuel it needs to continue raising its dividend by up to 5% annually. He managed to collect his payment for 29 consecutive years.

Bargain buy this September

Because Kinder Morgan, Brookfield Renewable and Enbridge trade at very cheap valuations, they offer high dividend yields and upside potential. It could easy generate double digit annual total income from here. That compelling combination makes them look like great buys this September.