Investing in high-dividend stocks can be a great way to generate passive income in 2025. Now is a great time to buy stocks, as many high-dividend stocks are selling off in the wake of the Federal Reserve’s recent decision to slow interest rates. Reduce next year. As a result, it now offers an even higher dividend yield.
for example, enbridge (NYSE:ENB) and WP Carry (NYSE:WPC) Due to the recent stock price decline, the current dividend yield is approximately 6.4%. this is, S&P500‘s (SNPINDEX: ^GSPC) Dividend yield (approx. 1.2%). So the $1,000 investment is split between them. high yield stocks You could earn about $65 in dividend income next year. Here, we take a closer look at what other attractive income options there are besides high yields.
Enbridge has an exceptional track record of paying dividends. canadian pipeline and utility The company has been paying dividends for nearly 70 years. meanwhile, In 2025, the amount paid will increase for the 30th consecutive year..
Generally speaking, the company Yield 6.4% The dividend is on a very sustainable basis. Enbridge has a low-risk business model; very Stable cash flow. Approximately 98% of the company’s revenue is derived from service costs or contracted assets supported by credit-worthy customers (over 95% with investment grade credit ratings). Enbridge’s cash flow is so predictable that it is on track to meet its financial guidance for 19 consecutive years.
Enbridge also has a conservative financial position. It pays out 60% to 70% of its stable cash flow as dividends. This provides a significant cushion and allows them to retain significant amounts of surplus funds to fund expansion projects. The company also has an investment grade credit rating. leverage ratio The trend is toward the lower end of the target range, which is 4.5 to 5.0 times.
The energy company’s strong financial profile gives it the ability to invest billions of dollars annually. We currently have a significant backlog of planned organic expansion projects. We have enough capacity to fund these projects and make bolt-on acquisitions when the opportunity arises.
Enbridge believes these drivers will increase cash flow per share by approximately 3% annually through 2026 and approximately 5% annually thereafter. So there should be plenty of fuel to continue increasing the dividend in the future.
WP Carey had been increasing its annual dividend for a quarter of a century until last year. However, a decentralized real estate investment trust (REIT) will reset the dividend after make strategic decisions Breaking away from the extremely difficult office sector. The payout ratio is now lower (with a target range of 70% to 75%) and the leverage ratio is lower (currently 5.4x, at the lower end of the mid-to-high 5x target). This gives you greater financial flexibility to acquire income-producing commercial properties with strong prospects for long-term rental growth.
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