Three Affordable Dividend-Yielding Shares Worth Considering for Purchase in 2025
Investing in dividend stocks can be a smart move, especially when you're looking for opportunities with minimal initial investment. Fortunately, there are top-notch dividend stocks that cost less than $100 per share. Three standout options are Brookfield Infrastructure, Realty Income, and NextEra Energy.
Ample growth awaits
As of writing, Brookfield Infrastructure shares cost around $40. This price point allows investors to lock in a dividend yield of around 4%, which is significantly higher than the broader market's average of roughly 1.2%. Over the past 15 years, this diversified global infrastructure company has shown impressive growth, increasing its dividend every year since its inception.
Brookfield boasts a strong financial foundation. Eighty-five percent of its cash flow is contracted or regulated, and it only pays out about 60-70% of its annual funds from operations (FFO) as dividends. The remaining funds are used to fund expansion projects, providing ample room for future growth. Brookfield has over $8 billion in projects in its backlog, which it expects to help drive FFO per share growth of more than 10% each year, supporting its goal of delivering annual dividend growth of 5-9%.
Steady growth continues
Realty Income shares are currently trading at around $55, providing a dividend yield of nearly 6%. The real estate investment trust (REIT) has a remarkable track record of dividend growth, having increased its payout every year since 1994 and delivering a compound annual dividend growth rate of 4.2% over the past three decades.
What sets Realty Income apart is its solid foundation. The REIT owns a diverse portfolio of net-leased properties that are leased to various global companies, ensuring stable rental income. Realty Income pays out about 75% of its income as dividends, and puts the rest towards growing its income-generating property portfolio. Realty Income also boasts one of the strongest balance sheets among REITs.
The REIT anticipates growing its adjusted FFO per share at a mid-single-digit annual rate in the future, driven by factors like rental increases, new property acquisitions, and management income from its recently-launched private fund platform. With trillions of dollars in commercial real estate in the U.S. and Europe that could potentially be net-leased, Realty Income has a long growth runway ahead.
A powerful tailwind fuels growth
At around $70, NextEra Energy's shares offer a 3% dividend yield. The utility company has increased its dividend annually for the past three decades and has grown its dividend at a compound annual rate of roughly 10% over the last two decades.
NextEra Energy's growth expectations are strong, thanks, in part, to the renewable energy sector. Power demand is projected to grow six times faster over the next two decades than in the previous two, which should drive robust demand for renewable energy. As a leading developer of renewable energy, NextEra Energy is poised to capture a significant portion of this growth.
At the end of 2023, NextEra Energy had a lower dividend payout ratio of 59%, which is below its peers' average of 65%. This lower payout ratio, coupled with a robust earnings growth outlook, supports NextEra Energy's goal of delivering 10% annual dividend growth through at least 2026 while maintaining its strong balance sheet.
High-yield, rock-solid dividend stocks
Brookfield Infrastructure, Realty Income, and NextEra Energy present attractive, high-yielding dividend opportunities with strong financial foundations. Their long-term track records of dividend growth make them compelling choices, especially for investors with limited funds.
In conclusion, if you're looking for high-yielding dividend stocks under $100 per share, these three stocks are worthy considerations. Each stock offers unique advantages, so investors should carefully weigh their options and consider their risk tolerance and investment goals before making a decision.
Investors who are interested in expanding their finance portfolio with minimal initial investment may find Brookfield Infrastructure's current share price of around $40 appealing. This price point allows for a dividend yield of approximately 4%, which is significantly higher than the broader market's average.
Realty Income's shares, currently priced at around $55, offer a near 6% dividend yield and have shown a remarkable track record of dividend growth for over three decades, making it an attractive option for investors seeking steady growth.
