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Enbridge plans to add $8B in new projects next year to boost cash flow and dividend capacity.
Pfizer generated $14B in free cash flow this year. Its Seagen and Metsera acquisitions target oncology and obesity markets.
Realty Income maintains a 98.7% occupancy rate across 15,500 properties and raised dividends four times this year.
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Jim Cramer has built a strong reputation in the industry. He’s the Mad Money host who carefully picks growth stocks that have the potential to survive market ups and downs. When it comes to dividend stocks, he thinks there are many stocks with a high yield, but as yields soar, it can become dangerous since the company may not be in a position to cover the cost of the dividend.
However, he thinks these dividend stocks are different, which is why he recommends them. Jim Cramer has picked out Enbridge Inc. (NYSE: ENB), Pfizer (NYSE: PFE), and Realty Income (NYSE:O) as his top dividend stocks.
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An oil pipeline company, Enbridge is not the same as an oil producer. Hence, it is impacted by the volume of the oil and not the cost. As an entity, Enbridge doesn’t have to worry about commodity prices but only the volume.
The midstream energy company has pipelines that transport crude oil produced in North America and serves over 7 million U.S. customers. As oil production increases, the company will see more business. Cramer thinks that the business is predictable and the customer base is wealthy. It is a diversified business with exposure to the renewable energy assets and natural gas utilities.
Enbridge has a yield of 5.98% and is exchanging hands for $47.53. Cramer thinks that the company offers downside protection and long-term growth potential. Enbridge runs a low-risk business, and it has strong fundamentals. It intends to add $8 billion worth of new projects next year, which could increase the cash flow. A higher cash flow means higher flexibility to increase dividend payouts.
It pays an annual dividend of $2.84 and has raised dividends for 2 years.
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A dividend giant, Pfizer has become one of the top choices of Cramer. He believes it works as a “bond equivalent.” The drugmaker has a yield of 6.86%. While the stock will not give you much share price appreciation, it will give a decent return.
The business continues to grow through acquisitions. Its acquisition of Seagen has helped its oncology franchise, while the acquisition of Metsera has placed it in the rapidly growing obesity market.
This acquisition has the potential to help Pfizer build a strong drug pipeline that could offset the patent expirations it is facing in the coming years. Exchanging hands for $25, the stock has dropped 5.7% this year. The company has increased dividends for 15 consecutive years and has a payout rate of 53.13%. It has a 5-year dividend growth rate of 3.62%.
Pfizer has hefty cash flows which allow it to cover the dividends. It generated $14 billion in free cash flow this year. PFE is a potentially cheap stock with the ability to generate sustainable income. Earlier this month, Cramer discussed Pfizer and mentioned that he’d hold on to the stock.
Realty Income is a real estate investment trust (REIT) that leases commercial properties to retail businesses. It offers a yield of 5.7% and is ‘”The Monthly Dividend Company.” Its tenants include grocery and dollar stores that sell necessities and continue to grow even in a weaker consumer spending environment. Realty Income owns 15,500 single-tenant properties and is steadily expanding its portfolio.
While investors are concerned about its tenant base, the company has an impressive occupancy rate of 98.7%, which shows its strength in the industry. Exchanging hands for $56.69, the stock is up 7.7% this year. The company pays an annual dividend of $3.24 and has a payout ratio of 75.30%. Realty Income has raised the dividend four times this year alone, and it has a 4.2% annualized growth rate in the past three decades.
With a history of 31 years of dividend growth, Realty Income remains one of the most reliable high-yield dividend stocks in the market today. The company is setting a solid standard in the industry, and its large portfolio of commercial properties will continue to drive growth in the coming years.
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