High-yielding dividend stocks have been underperforming in recent years due to higher interest rates. However, given the expectations that the Federal Reserve will start cutting interest rates soon, several high-quality, high-yield dividend stocks are looking like screaming buys this September. Three top picks for this month are Kinder Morgan, Brookfield Renewable, and Enbridge. Kinder Morgan currently yields over 5% and is trading at a cheap valuation of less than 10 times earnings. The company has several upside catalysts, including high-return capital projects and a history of increasing dividends for seven straight years.
Brookfield Renewable currently yields around 5% and trades at 15 times earnings, providing significant growth potential. The company expects to grow its funds from operations by more than 10% annually through 2028, allowing for dividend increases of 5% to 9% annually. With the increasing demand for renewable energy, Brookfield Renewable has significant long-term upside potential, which the market is currently underestimating. Enbridge, a Canadian pipeline and utility company, currently yields over 6.5% and trades at less than 10 times free cash flow. The company has a large amount of capital projects under construction that should support 3% annual cash flow per share growth through 2026 and 5% per year after that. Enbridge has a track record of increasing its dividend for 29 straight years.
These three companies offer high dividend yields and significant upside potential, making them attractive investments for investors seeking income and growth. With their dirt cheap valuations and potential for double-digit total annual returns, Kinder Morgan, Brookfield Renewable, and Enbridge are compelling buys this September. It is important to note that while Kinder Morgan is a solid investment, the Motley Fool Stock Advisor analyst team has identified other stocks with even greater potential for monster returns in the coming years. The Stock Advisor service provides investors with guidance on building a successful portfolio and has surpassed the return of the S&P 500 since 2002. Investors looking to diversify their portfolio may want to explore other opportunities beyond Kinder Morgan to maximize their returns.
