Chip and Dan Heath wrote a great book titled Decisive several years ago about making better decisions. One of the key steps the brothers discussed was to attain distance before making a final decision on something important. In other words, stop and think about it before taking action.
That recommendation is nearly always a smart thing to do when buying stocks. However, there are some stocks with fantastic underlying businesses that pay attractive dividends I wouldn’t have to mull over whatsoever before scooping up. Here are three dividend stocks I’d buy right now without any hesitation.
It’s pretty much a no-brainer that renewable energy will enjoy greater demand in the future. Countries and major corporations are scrambling to reduce their carbon emissions.
Brookfield Renewable (NYSE:BEP) (NYSE:BEPC) stands out as one of the world’s leading suppliers of renewable energy. The company operates hydroelectric, wind, solar, and storage facilities across North and South America, Europe, and Asia.
This isn’t just another boring utility stock. Brookfield Renewable has delivered an annualized total return of close to 18% over the last two decades. It expects to generate annual returns in the ballpark of 15% over the long term. The stock could easily outperform the overall market for years to come.
Part of the appeal of Brookfield Renewables is its strong dividend. Its dividend yield is close to 3% (a little higher for the limited partnership shares trading under ticker BEP and slightly lower for the corporate shares trading under ticker BEPC). The company has increased its distribution by a compound annual growth rate of 6% since 2000.
Easterly Government Properties
What’s the biggest risk for a real estate investment trust (REIT)? The possibility that its tenants can’t pay. However, there’s one REIT that doesn’t have to worry about that scenario — Easterly Government Properties (NYSE:DEA).
As its name implies, Easterly owns and leases properties to government agencies. For Easterly, that means federal agencies. All but two of its 82 properties currently owned are leased to the U.S. government.
Easterly continues to add new properties, though. The company recently boosted its full-year earnings guidance because of what CEO William Trimble referred to as “an increasingly strong pipeline of actionable acquisition opportunities.”
As a REIT, Easterly must return at least 90% of its taxable income to shareholders through dividends. Higher earnings, therefore, lead to higher dividend payouts. That’s especially great considering that Easterly’s dividend already yields 4.9%.
Innovative Industrial Properties
Imagine if you could buy a stock that operates in a high-growth market that’s also a REIT with a strong dividend. You don’t have to use your imagination with Innovative Industrial Properties (NYSE:IIPR).
IIP is the leading provider of real estate capital for the medical cannabis industry. The company’s niche is sale-leaseback transactions. In these deals, a medical cannabis operator sells a property to IIP, which then leases the property back to the operator.
As of Jul. 6, 2021, IIP owned 72 properties in 18 states. At the end of 2020, it owned 66 properties. The REIT’s “rinse-and-repeat” strategy of adding new properties has enabled it to grow revenue by more than 1,000% over the last three years with profits skyrocketing more than 1,500%. With the U.S. medical cannabis market expanding, I think that IIP can keep its momentum going.
At first glance, IIP’s dividend yield of 2.8% might seem good but not great. However, the company has quadrupled its dividend payout over the last three years. The yield isn’t higher for a simple reason: IIP’s share price has soared even more than its dividend has. That’s the kind of dividend stock you can buy without giving it a second thought.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.