Those in retirement have likely struggled to find promising risk-rewards in the market today. A decade of ultra-low interest rates, plus a lot of technological disruption, have enabled growth stocks to shine. Meanwhile, reasonably priced dividend stocks have had it tougher. Those companies are usually the targets of said disruption, and the pressure to pay out high dividends can limit reinvestment in their businesses.
However, there are cases of high-dividend stocks out there that also have defensive business models and strong growth prospects. You may just have to look a little bit harder.
Today, Brookfield Infrastructure Corporation (NYSE:BIPC), Bank of America (NYSE:BAC), and Crown Castle International (NYSE:CCI) not only pay out solid dividends, but they also have defensible competitive positions, with a path to raise those dividends over time. Here’s why each of these stocks are well worth a retiree’s attention today.
Brookfield Infrastructure, as its name suggests, owns infrastructure assets globally, across utilities, transportation, midstream energy, and data infrastructure. Despite the plunge in energy demand and global trade this year amid COVID, Brookfield’s funds from operations (FFO) still grew 5% in 2020. In fact, the company just raised its 3%-yielding dividend by 5% as well.
That shows the resiliency of the company’s assets. The transportation segment, which is very sensitive to global trade, only saw a slight decline, and midstream energy actually grew. Utilities declined, but that was entirely due to the depreciation of the Brazilian real; outside of that, the utilities segment would have grown 6%.
The star grower, however, is the data segment, which grew FFO 44%. While the data segment only made up 13.4% of the company’s total FFO, its high growth and favorable prospects in the age of 5G should enable Brookfield to maintain or even accelerate its growth rate in the years ahead.
Meanwhile, President Biden is reportedly wooing lawmakers on a large infrastructure bill, which is the next legislative priority after the American Rescue Plan. Since these projects can be very expensive, more public-private partnerships with companies like Brookfield could be in the offing.
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