Adding Power to Grow: Southern Company
Southern Company offers a dividend with a yield of 4%, which is more than double the dividend yield of the S&P 500. The company has a remarkable track record of consistently paying dividends that either match or exceed the previous quarter’s level for 75 years. Furthermore, Southern Company has increased its dividend for 22 consecutive years.
The company has invested over $10 billion in constructing two nuclear power-generating units, Vogtle 3 and 4. Unit three is already in service, while unit four is set to begin commercial operations in early 2023. This significant investment provides Southern Company with the financial resources to expand its utility business, including its Southern Power renewable energy platform, and continue increasing its dividend.
Rapid Growth Ahead: Brookfield Asset Management
Brookfield Asset Management currently offers a dividend yield of 3.2%. The company expects to achieve annual growth of 15% to 20% in fee-related earnings over the next few years. It plans to distribute over 90% of these recurring earnings as dividends, indicating the potential for a similar increase in the dividend rate.
Brookfield’s growth outlook is driven by its goal to expand its fee-bearing capital base to over $1 trillion by 2028, more than doubling its current assets under management (AUM) of $440 million. The company’s ability to raise larger flagship funds and launch new funds, such as the Brookfield Infrastructure Fund V and the Catalytic Transition Fund, will contribute to its growth and enable it to rapidly increase its dividend.
A Tasty Dividend: Darden Restaurants
Darden Restaurants currently provides a dividend yield of 3.2%. While the company temporarily reduced its dividend in 2020 due to the pandemic’s impact, it has since restored it to pre-pandemic levels and even increased it by 8% earlier this year.
The restaurant operator anticipates further dividend growth in the future as it continues to expand its restaurant count and same-store sales. Darden plans to open 50 new restaurants in fiscal 2024 and aims to achieve a growth rate of 2.5% to 3.5% in same-store sales. In addition, the recent acquisition of Ruth’s Hospitality Group will contribute to Darden’s earnings per share and provide opportunities for further organic growth.
Southern Company, Brookfield Asset Management, and Darden Restaurants stand out as excellent options for investors seeking dividend stocks. Their dividend yields surpass that of the S&P 500, presenting the potential for significant income growth. With their consistent payout history and strong growth prospects, these companies offer attractive income streams that have the potential to outperform the broader market.