Investing in high-yielding dividend stocks doesn’t usually entail more risk. Companies that consistently pay out dividends with high yields are becoming more commonplace. Consolidated Edison (NYSE:ED), TotalEnergies (NYSE:TTE) and Enterprise Products Partners (NYSE:EPD), are three of the highest yielding dividend stocks of 2021, that have impressed one and all because of their reliability and yield. We’ve laid out the reasons why it is believed that investors should take advantage of them.
Consolidated Edison is a dividend-paying firm that investors can rely on for a steady supply of income. It has grown its dividend for 47 years in a row, the longest run of any S&P 500 utility. This is a Dividend Aristocrat, and surely a Dividend King in the making.
Consolidated Edison is a fantastic investment opportunity for those looking for a steady stream of income right now because of its reliability and two other characteristics. To begin with, it is now trading at a favorable price. Over the last year, the stock has lost nearly 6% of its value, resulting in a dividend yield of more than 4%. At a time when the S&P 500’s average dividend yield is less than 1.3 percent, this company stands out. It’s also one of the most undervalued companies in its industry.
In addition, it has an upside. In the wake of the recent pandemic, the New York City-based utility’s earnings have taken a hit. That being said, the city is beginning to recover, which could lead to better outcomes in the near future. Consolidated Edison is making significant investments in order to strengthen the long-term viability of its business. As the second biggest solar energy producer in North America, it is putting a lot of money into green energy and increasing the safety and dependability of its operations. Increased revenue from these initiatives is expected to boost the company’s ability to raise dividends in the future.
TotalEnergies has traditionally been recognized as one of the world’s biggest oil and gas corporations, but the firm is expanding its scope to become a multi-energy firm. When it comes to oil or energy, TotalEnergies is one of the most exciting companies to hold right now since the globe is moving from fossil fuels to sustainable energy. In fact, it has one of the highest dividend yields of any oil and gas company at 6.3 percent.
TotalEnergies estimates oil and oil products to account for just 30% of total revenues by 2030. Biogas, hydrogen, domestic gas, and liquefied natural gas are estimated to account for about half of its sales. The company expects its power division to make up as much as 15% of its total sales by the end of the decade, as a result of its planned expansions scheduled for the near future in the sector.
Total Energies has engaged into a slew of partnerships and collaborations in recent times, demonstrating its commitment to renewable energy.
Nearly a quarter of TotalEnergies’ investments are expected to be made in renewables and electricity sectors between 2021 and 2025. To put that in perspective, it would equate to approximately $15 billion in spending, which is projected to boost cash flow and sustain dividend growth for the firm. At present pricing, TotalEnergies is one of the highest yielding dividend stocks of 2021 to invest in for the long term because of the company’s focus on renewable energy projects and raising dividends while keeping a stable balance sheet.
With its 23 years of uninterrupted development in sales, Enterprise Products Partners is undeniably reliable. However, the master limited partnership (MLP) and its substantial 7.8 percent dividend yield should be given credit for their performance. In a recent investor presentation, it was revealed that “supporting and expanding cash payments to partners” was the top priority regarding how management plans to distribute resources.
Enterprise Products Partners’ 23-year streak of distribution growth is one of the core reasons why analysts demonstrate faith in the firm. But the 7.8 percent distribution yield of the master limited partnership (MLP) isn’t reflected in that claim. “Support and expand cash payments to partners” was the top priority in a recent investor presentation on how the company’s management planned to deploy funds.
How is Enterprise able to do this? As an instance, their debt-to-EBITDA ratio of 3.9 times is much lower than its nearest competitors’. When things are tough, having a little extra cash on hand may be a godsend. In addition, Enterprise’s third-quarter 2021 dividend was covered by distributable cash flow 1.7 times. To put it another way, the MLP has plenty of leeway before the distribution is in danger of being slashed. An income stock that wishes to deliver a consistent dividend would make these kinds of prudent judgments.
Though the future of oil and natural gas midstream assets is a source of anxiety for some, given investors’ attention to environmental, social, and governance (ESG) problems, this shouldn’t be a major concern. The energy transformation is likely to take several more years to fully materialize. According to Enterprise, even as oil’s part of the energy pie decreases, demand will continue to climb until 2040 as a result of growing living standards and population expansion. Meanwhile, as cleaner natural gas replaces older, dirtier coal, its market share will rise. Keeping all that in mind, the bottom line here is that Enterprise appears like it’s in for some very steady financial growth in the next few years.
We hope that this article was able to provide you sufficient insight into some of the highest yielding dividend stocks of 2021. To track the performance of your favorite symbols, add them to your watchlist here. And don’t forget to follow our Youtube channel to view useful investing videos. Thanks for reading.
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