2 Ultra-High Yielding Dividend Stocks You Can Buy and Hold for a Decade

The average value of dividends currently has a yield of less than 1.5% on the basis S&P 500his dividend yield. That’s well below the long-term historical average of over 4%, as many companies have cut dividends in recent years.

However, there are a few hot spots for those looking high dividend yields. More energy stocks they have plenty of fuel to grow their high-octane dividends in next decade. Enbridge (ENB -0.73%) and Clearway Energy (CWEN.A 0.15%) (CWEN -0.20%) it is among the most notable dividends in the sector, with payouts yielding over 5%. They expect to increase these high dividends in the coming years. That makes them buy and hold stocks with great income for the next decade.

A car that pays dividends

Enbridge has been one of the energy sectors’ best dividend stocks for decades. Canadian PIPE and utility the company has paid dividends for over 69 years and has increased its payout for the past 29 years in a row. It should have enough fuel to keep paying dividends for the next decade.

Reinforcing this outlook is the remarkable predictability and durability of its earnings. Enbridge has hit its financial guidance for 18 consecutive years. This includes two major recessions and two additional periods of oil market turbulence. The stability of its earnings is driven by predictability, with 98% coming from cost of service or contracted assets. Meanwhile, more than 95% of its earnings come from investment-grade clients, while 80% of his earnings they have protection against inflation.

Enbridge pays outside 60% to 70% of its very stable cash flow in dividends. This payout currently yields more than 6.5%. The company’s conservative payout ratio gives it plenty of breathing room while allowing it to retain billions of dollars in cash each year to fund its continued expansion.

The company at present has billions of dollars in guaranteed capital projects in the pipeline, mostly focused on low-carbon energy such as new natural gas pipelines, gas utility expansions and renewable energy projects. It expects to complete these projects by 2028, giving a lot of visibility into future earnings growth. Meanwhile, it has many other expansion projects under development that could expand its growth prospects in the future. These help support Enbridge’s view that it can grow earnings by about 5% annually for the foreseeable future. This should give the company the fuel it needs to continue raising its dividend by up to the same annual rate.

A fully fueled growth plan in the near term with more to come

Clearway Energy is leading the way renewable energy producer. It also generates power from a portfolio of environmentally friendly natural gas-fired power plants. These assets generate very predictable cash flow, which it uses to pay dividends. Clearway’s payout is currently over 5.5%.

The company has tremendous near-term visibility into its ability to grow this payout. It expects to expand the dividend toward the upper end of its target range of 5% to 8% by 2026.

The power of this plan is his recycling capital strategy. Clearway cashed in on the value of its thermal assets several years ago. He consistently distributed the income in with higher yield investments in renewable energy. The company has now fully engaged the entire amount, giving him a clear line of sight in its ability to grow its cash flow (and dividends) over the next two years.

Clearway should have enough fuel to keep growing after 2026. It has already started to stall in new contracts for the sale of electricity at its natural gas plants. The rates are entering high enough to support dividend growth towards the lower end of its target range in 2027 on this factor alone. In the meantime, they should have ample opportunity to continue making new investments in renewable energy, given unprecedented need for new capabilities in the future.

Enough fuel to pay dividends

Enbridge and Clearway Energy currently offer high dividend yields. They back up those payments with a very steady cash flow. The duo has it too a lot of future growth as demand for energy increases, particularly for low-carbon energy. Because of this, they are great stocks to buy and hold for the next decade, as they should have the fuel to pay and grow their dividends for years to come.