3 best dividend shares to buy now – The Motley Fool – tech2.org

3 best dividend shares to buy now – The Motley Fool


Discuss the best or best dividend shares, and chances are high-performance stocks will be the center of the conversation. It is true that performance is a decisive factor for investors seeking dividends, but high performance does not necessarily generate a large amount of dividends. Prudent income investors should look beyond returns and pay more attention to the trend of a company's cash flows, the prospects for dividend growth and history, among other things, before adding shares to their portfolios . If cash flows and dividends are not growing, a high-yield stock could even catch it.

For example, the dividend yield of (19459006) of CenturyLink (19459007) soared up to 16%, attracting value investors and revenues alike. Some investors are betting on the acquisition of Level 3 Communications by telecommunications to help get out of the storm, but in the absence of visibility of earnings growth and a payment above 100%, the dividends of CenturyLink are so risky as they can. [19659002] As an investor with a long-term dividend perspective, you may want to avoid CenturyLink at this time. Instead, you should look for stocks in high-quality businesses with strong earnings growth potential that can pay you stable dividends, and even higher, year after year. Three of those major dividend shares you can buy today are industrial conglomerate 3M (NYSE: MMM) alternative badet manager Brookfield Asset Management & # 39; s (NYSE: BAM) Infrastructure arm Brookfield Infrastructure Partners (NYSE: BIP) and midstream oil and gas play Enterprise Products Partners (NYSE: EPD ) .

This stock of dividends is a gold mine for rental investors

Brookfield Infrastructure Partners broke away from Brookfield Asset Management in 2008, and the stock has not looked back since: it has been one of five exchanges plus the period , with almost half of those returns coming only from dividends. The current performance of the 3.9% share seems very safe.

  A roll of dollars with a dividend sign next to it.

Buying the best dividend shares at the right time can substantially increase your income. Image source: Getty Images.

In fact, Brookfield is growing at a much stronger pace than its parent organization, having increased its working capital more than tenfold in the last decade compared to 90% growth in Brookfield Asset Management's FFO. Two things have worked in favor of Brookfield Infrastructure: a portfolio of high-quality badets and credible management that efficiently directs the company towards growth.

As an infrastructure badet company, Brookfield acquires high quality and distressed badets at value prices in all key sectors such as utilities, railways, telecommunications, infrastructure and energy, and gives them a profitable turn. The fact that most of these industries offer essential services and, therefore, generate long-term or regulated contracted income helps Brookfield a lot in obtaining stable cash flows and offering constant dividends.

Brookfield has increased its dividends to a compound average of 12% since 2009 and has established two broad "long-term" goals: increase its dividends annually by 5% -9% and obtain capital returns of 12% -15% . Revenue investors can not be wrong with an action that pays dividends that prioritizes the returns of shareholders.

59 years of dividend and counting increases

3M's small dividend yield of 2% may not attract income investors, but the conglomerate has an impeccable dividend track that is unlikely to break soon .

3M belongs to the Dividend Aristocrat elite group, which consists of companies that have increased their dividends for at least 25 consecutive years, regardless of economic cycles. 3M has paid uninterrupted dividends for 100 years, has increased them for 59 consecutive years, and is only a year away from joining the handful of companies that have increased their dividends for six decades or more.

Behind 3M's incredible dividend record is its huge diversified portfolio, which consists of more than 60,000 products, and brand power backed by familiar names such as Post-it, Scotch and Command. Through its five operating segments, 3M serves almost all industries today, including consumption, manufacturing, health, energy, transportation, airlines, electronics, mining and oil and gas.

Recently, 3M improved its earnings growth per share in the fiscal 2017 projections to 10% -12%, and trusts to fulfill its five-year growth plans that it unveiled in 2016.

  Graph showing the objectives 3M financial statements for 2017-2020.

3M's solid dividends are backed by strong earnings and cash flow growth. Image source: Getty Images.

Based on 3M's strong recent operating performance and managed management growth of 8% -11% in EPS through 2020 with 100% free cash flow conversion (percentage of net income converted to FCF), investors of income can rely on 3M for a constant flow of dividends in the coming years.

When a slow dividend growth generates a greater amount of dividends

With a dividend yield of 7%, Enterprise Products Partners is the highest performing stock on this list today And although the shares of the oil company and Midstream gas have renounced some gains in recent times, their dividends are backed by solid operating numbers and management's practical approach towards capital allocation.

  Oil pipelines.

The dividend yield of Enterprise Products Partners seems secure. Image source: Getty Images.

In a move that may have bothered investors in dividends, Enterprise Products Partners recently halved its quarterly distribution growth rate (dividends) to $ 0.0025 per share through next year. As my fellow Fool Matt DiLallo succinctly explains here, it is crucial that a master limited company have a solid balance sheet and a strong proportion of distribution coverage. That is exactly what Enterprise intends to do, as CEO Jim Teague explained how rate moderation will "further strengthen our distribution coverage, increase our retainable distributable cash flow available to fund growth capital opportunities and reduce shareholder dilution." "

Remember, Enterprise is not cutting its dividends but now it will only make them grow at a slower pace. That means that while the company can use the additional cash to finance its large portfolio of expansion projects, revenue investors can still expect higher dividends quarter after quarter. Enterprise, for its part, will continue its streak, having increased its dividends for 53 consecutive quarters now.

By 2019, the administration believes it will have retained enough cash to finance the capital portion of a $ 2.5 billion capital investment and even start a share repurchase program to return any excess cash to shareholders. I would not be surprised if Enterprise recovered its dividends again. Now, this is a high performance stock that seems safe, thanks to the prudent dividend policy of the administration.


Each of the three dividend shares I discussed here have three things in common: a strong dividend history, firm dividend growth targets and a commitment to shareholder returns. When you can identify these factors in an action and build a dividend portfolio accordingly, you can be sure that you have the best dividend stocks that will not disappoint you in the long term.

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