Hold These 3 Dividend Stocks for Strong Returns Over 5 Years
As investors seek reliable income sources, dividend stocks remain a popular choice. For those looking for strong returns over the next five years, three companies stand out: Clearway Energy, Kinder Morgan, and ConocoPhillips. Each offers promising growth prospects and the potential for increasing dividends.
Clearway Energy: A Leader in Clean Power
Clearway Energy is recognized for its extensive portfolio of clean power assets, including wind and solar energy. The company generates revenue through long-term contracts with utilities and large corporations, ensuring a steady cash flow.
- Current Price: $35.65
- Market Cap: $4 billion
- Dividend Yield: 4.88%
- Projected Dividend Rate: $1.98 per share by 2027
Clearway plans to distribute approximately 70% of its stable cash flow as dividends. By 2027, it aims to elevate its cash flow per share to $2.70, with long-term projections suggesting it could reach $3 by 2030.
Kinder Morgan: Expanding Natural Gas Infrastructure
Kinder Morgan is one of the largest natural gas pipeline companies in the United States. Its operations are supported by fee-based contracts and regulated rate structures, enabling stable cash generation.
- Current Price: $26.96
- Market Cap: $60 billion
- Dividend Yield: 4.32%
- Expansion Projects: $9.3 billion backlog through 2030
The company maintains a disciplined approach by distributing around 50% of its cash flow as dividends. With ongoing expansion and rising demand for natural gas, Kinder Morgan’s cash flow is expected to grow significantly, supporting further dividend increases.
ConocoPhillips: A Strong Player in Oil and Gas
ConocoPhillips boasts a well-diversified and durable portfolio within the oil and gas sector. With low-cost oil supplies, the company can generate substantial cash flow even at reduced oil prices.
- Current Price: $87.34
- Market Cap: $108 billion
- Dividend Yield: 3.64%
- Projected Free Cash Flow Growth: $7 billion incremental increase by 2029
The business expects to enhance its annual free cash flow by an additional $1 billion each year from 2026 to 2028. With significant projects, including the Willow oil project in Alaska, ConocoPhillips is set for robust financial growth, allowing it to continue its dividend increases.
Conclusion: Ideal Dividend Stocks for the Long Term
Clearway Energy, Kinder Morgan, and ConocoPhillips offer strong growth visibility and the potential for increasing dividends, making them ideal holdings for investors. As they expand their operations, these stocks can be expected to deliver solid returns over the next five years.
