As the new year approaches, how would you like to be set up to receive additional income from a stable, growing companies?
Here are three such companies that will ensure that your portfolio’s income-generating capacity keeps growing far into the future.
With a current dividend yield of 4%, Brookfield Infrastructure Partners L.P. (TSX:BIP.UN)(NYSE:BIP) is a high-yielding play that is set to see continued growth in its dividends in the years ahead.
Investors can feel secure with this name and have confidence in this dividend by looking at the company’s assets, which are long-life assets that provide essential services and have highly predictable cash flows. Investors can also look at the company’s history of dividend increases.
Since 2009, Brookfield has grown its funds from operations by a cumulative average annual growth rate (CAGR) of 24% and it’s per-unit distribution by a CAGR of 12%.
I don’t mean to imply that the past is necessarily the best reflection of the future, but looking at past results tells us a lot about management’s goal of returning capital to shareholders.
Management’s plan, which targets 5-9% annual growth in distributions and long-term ROEs of 12-15%, seems highly reliable.
To support these goals, management has a long list of opportunities and ample liquidity to act on them.
Altagas Ltd. (TSX:ALA) shares currently present as a good opportunity for investors that can see beyond the immediate uncertainty. The shares have declined 30% in the last three years and 15% since the beginning of this year. The good part to this is that new investors can get into this stock, which is now trading at a 7.54% dividend yield.
The story going forward is all about the WGL acquisition, which will be accretive to earnings and cash flow, and the company’s asset-disposition plan to fund the acquisition.
Investors can expect a dividend increase this year, and an 8-10% growth rate in dividends for a payout ratio of between 50% and 60% until 2021.
Lastly, Northland Power Inc. (TSX:NPI) is a strong renewables energy provider with a dividend yield of 5.06%.
This independent power producer is dedicated to developing, building, owning, and operating facilities in Canada and internationally.
With Northland, investors can get a piece of the fast-growing renewable energy sector, which is one that will continue to provide investors with healthy returns for the foreseeable future.
Two things are especially worth a mention. First, Northland’s management owns approximately 35% of shares outstanding, so management’s interests are aligned with shareholders. Second, 98% of the company’s revenues are from long-term power contracts, so there is good stability in the company’s financial results.
As for growth going forward, Northland is looking to Taiwan, where it plans to invest heavily in fixed-term offshore wind contracts.