Dividend stocks can be a saviour this year as we enter 2024. Yet investors must also think about what’s coming afterwards. Not just where the market is headed, but what their goals are, and how dividend stocks can help.
So today we’re going to look at three dividend stocks that investors should consider no matter what 2024 brings. That’s because the future looks strong for the sector in general.
Going green
With lower interest rates likely on the way, analysts believe there is going to be a far better situation coming for renewable and sustainable energy and clean technology stocks. This comes after quite a volatile 2023, preceded by several years of these stocks falling further and further.
The industry faced challenges despite the world overcommitting to bringing in an energy transition. Yet supply-chain disruptions, pandemic issues, geopolitical tensions, and increased costs all brought shares lower. There also remained the issues surrounding policy and regulation uncertainties, especially in key markets. All this contributed to producing lower reinvestment.
Yet here’s the thing. These companies remained strong even through these incredibly difficult times. In fact, some proved to be quite resilient, and continued to innovate and create deals that will serve them well in the years and, indeed, decades to come. So for 2024, investors shouldn’t look behind, but well ahead.
With that in mind, I would consider three dividend stocks in this field on the TSX today.
The most valuable choices
When it comes to value, it doesn’t get much better than Innergex Renewable Energy (TSX: INE) and Northland Power (TSX: NPI). Analysts specifically identified these choices as shares return to a normal price target range, and visibility increases as share prices grow.
Both dividend stocks are set to increase substantially in the next year. This is especially thanks to new projects getting underway as prices come down, and more projects are added, especially in European markets. INE and NPI stock, in particular, have been poor performing stocks in the last year. So now, the improving sector outlook should bring in more growth for the companies.
For now, INE and NPI stock hold incredible dividend yields. INE stock offers a 7.85% dividend yield, with NPI stock holding at 4.91% as of writing, with the latter dishing out monthly. With shares still a fraction of 52-week highs, now could be the time to buy as the market recovers, and continues to improve in the years to come.
A big winner
Then there’s going big rather than looking for the cheapest of the cheap. For that, I would look to Brookfield Renewable Partners LP (TSX: BEP.UN). The stock is now set to seriously outperform in the years to come, with the company making some smart moves recently as the market shifts.
This includes a new strategy to invest in companies that are in the sustainable and renewable energy space. That means less upfront costs to invest in assets, while still making some killer cash. Then there are the pieces already mentioned, such as the higher rate environment falling once more.
But for Brookfield stock, the company has a competitive advantage as it has strong access to capital. Therefore, it can get in on deals before most other clean energy companies will be able to. And with so much already in its pipeline, the stock should easily hit its 10% funds from operation (FFO) per unit growth target.
For now, shares are stable with where they were a year ago, marking a recovery in the last few months. You can grab a 4.9% dividend yield then during this recovery, and hold it for as long as possible!
