Investors looking for ways to bolster their passive income streams have a pair of high-yield dividend payers to choose from right now. Shares of Brookfield Infrastructure Corp. (NYSE:BIPC) and W.P. Carey (NYSE:WPC) offer yields above 3% at recent prices.
Both of these stocks have a long history of raising the payments they distribute to investors and seem highly likely to raise their payouts even further in the years ahead. Read on to see how this pair of dividend growth stocks could produce heaps of passive income for patient investors.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. See the 10 stocks »
1. Brookfield Infrastructure Corporation
If you're moving energy, data, or people from Point A to Point B, there's a good chance you're using an asset owned by Brookfield Infrastructure. With 25,600 kilometers of pipelines, 2,900 kilometers of power transmission lines, 140 data centers, 54,000 kilometers of fiber optics, and hundreds of thousands of tower sites in its portfolio, it's one of the largest infrastructure businesses you can invest in.
Infrastructure might seem old and boring, but not the way Brookfield does it. The company has been investing in assets that benefit from growth in global data demand, such as 5G towers, electricity transmission lines, data centers, and fiber optic connections. Now more than 60% of this asset manager's funds from operations (FFO), a proxy for earnings, are poised to grow along with our insatiable demand for more data.
Brookfield Infrastructure expects to raise its dividend payout at a rate of 5% to 9% annually. Soaring profit from its transport and data segments could allow it to reach the high end of this target range. Third-quarter FFO from its data segment soared 29% year over year. A recent acquisition boosted third-quarter FFO from its transport segment 50% higher year over year.
At recent prices, Brookfield Infrastructure offers a juicy 3.8% dividend yield, and investors can rely on significant growth in the years ahead. At the moment, its dividend is set at an annualized $1.62 per share.
The company doesn't report full-year 2024 results until Jan. 30. Months ago it was expecting FFO to reach $3.10 per share for the full year, which is plenty more than it needed to meet its dividend obligation. With the payout well funded, investors can reasonably look forward to a series of significant payout bumps over the next few years.
2. W.P. Carey
W.P. Carey is a real estate investment trust (REIT) that produces more profit than it needs to meet its dividend payout. At recent prices, the stock offers a big 6.4% dividend yield that could climb a lot higher in the years ahead.
REITs like W. P. Carey are popular among income-seeking investors because they produce highly predictable cash flows. What makes them predictable is that REITs make tenants sign net leases that transfer all the variable costs of building ownership, such as taxes and maintenance, to the tenant.
W.P. Carey reduced its dividend payout in late 2023 to account for the spinoff of its office building segment. Separating its successful operating segments from the underperforming office business was the right move, but cautious investors are still concerned that one dividend reduction will lead to more down the road.
Instead of a reduction, W.P. Carey seems likely to keep raising its payout for the foreseeable future. The spinoff of Net Lease Office Properties left the REIT flush with cash that it's redeploying with both hands. In 2024, W.P. Carey added investments worth $1.6 billion to its portfolio.
W.P. Carey raised its payout four times in 2024 to an annualized $3.52 per share, and there's plenty of runway to lift it further. In October, the REIT told us to expect 2024 adjusted FFO to land in a range between $4.65 and $4.71 per share. With such a high yield up front and a high likelihood of significant growth ahead, adding some shares to a diverse portfolio right now looks like a great idea.
Should you invest $1,000 in Brookfield Infrastructure right now?
Before you buy stock in Brookfield Infrastructure, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Brookfield Infrastructure wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $725,740!*
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.
*Stock Advisor returns as of January 27, 2025
Cory Renauer has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
/Tesla%20Inc%20tesla%20by-%20Iv-olga%20via%20Shutterstock(1).jpg)
/Stickers%20with%20AMD%20Radeon%20and%20Nvidia%20GeForce%20RTX%20graphics%20on%20new%20laptop%20computer%20by%20Piotr%20Swat%20via%20Shutterstock.jpg)
