The best thing about quality high-yield stocks is their income-generating capability for their shareholders. It would be even better if these stocks offered a growth component.
Investors, you’re in luck. Here are two stocks that offer both a big income and some growth.
Brookfield Renewable Partners (TSX: BEP.UN)(NYSE: BEP) owns and operates one of the largest publicly-traded renewable power platforms on the planet. It’s obviously a leader as it has maintained an investment-grade balance sheet and a rate of return of 12-15%, unlike its peers, who generate a rate of return of 8-10%.
The global power supply is about 74% nuclear and fossil fuels, and only 17% hydro and 9% solar and wind. Brookfield Renewable is the perfect investment to ride on for the decades-long transformation from fossil fuels to renewables.
The company’s operations span 25 markets in 10 countries, which means that it can invest in the markets that offer the best group of risk-to-reward opportunities for its capital at any time.
It has 876 power-generating facilities that are worth US$43 billion with 17,400 MW of capacity. Its portfolio is 76% hydroelectric generation, 20% wind, and 4% solar.
Management sees visible growth of 6-11% for its funds from operations per unit, which, along with its largely high-quality contracted cash flow, offer a safe, growing cash distribution.
At under $39 per unit as of writing, Brookfield Renewable offers a rich cash distribution yield of about 6.5%. Its distribution per unit will be growing 5-9% per year going forward. This stock is trading near its 52-week low and is on sale!
Some analysts estimate total returns potential of about 20% over the next year from an investment today.
NorthWest Health Prop Real Est Inv Trust (TSX:NWH.UN) has done quite well by appreciating about 30% in the last three years while offering a high yield.
NWH.UN data by YCharts. NWH.UN’s three-year price returns.
The main reason for the price appreciation was that the stock was a bit undervalued three years ago. Additionally, NorthWest Healthcare Properties has some long-term indexed leases that help with growth.
The real estate investment trust’s (REIT) diversified portfolio consists of 152 medical office or hospital properties throughout major markets of Canada, Brazil, Germany, Australia, and New Zealand.
Its assets outside Canada is what supports a high occupancy of about 96% and a long weighted average lease expiry of about 12 years. The REIT’s stable cash flow along with its payout ratio of about 89% support its big cash distribution.
At $10.86 per unit as of writing, NorthWest Healthcare Properties offers a juicy cash distribution yield of 7.37%.
Some analysts estimate total returns potential of about 18% over the next 12 months from an investment today.
Investor takeaway
Both Brookfield Renewable Partners and NorthWest Healthcare Properties are on sale for high distribution yields of 6.5-7.4% today. They also have growth components built into their business models that should lead to price appreciation in the long haul.
