Set It and Forget It: 3 Monster Dividend Stocks Worth Holding for 10 Years
Key Points
Chevron has increased its dividend for 39 straight years.
Clearway Energy expects to grow its cash flow per share by at least 5% per year for the foreseeable future.
Williams has paid dividends for more than 50 years.
If you're like most people, you don't have a lot of free time. And you probably don't want to use what precious little you have managing your portfolio. You just want to buy a few high-quality stocks and then forget about them until it's time to retire.
Here are three dividend stocks you can buy, set up for automatic dividend reinvestment, and forget for the next decade. Their combination of high dividend yields and steady dividend growth should give them the fuel to generate monster total returns in the coming years.
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Chevron
Chevron (NYSE: CVX) is a global energy giant. It currently offers a 3.9% dividend yield (more than triple the S&P 500's 1.1% yield) and has increased its payment for 39 consecutive years. Chevron's growing dividend has given it the fuel to deliver a robust total return of more than 180% (11.1% annualized) over the last decade (assuming dividend reinvestment).
The oil company currently expects to grow its free cash flow at a more than 10% compound annual rate through 2030, assuming oil averages $70 a barrel (it's currently in the $90s). Chevron has ample growth potential beyond that timeframe due to recently secured growth drivers and its investments in new energy businesses, including lithium, hydrogen, and gas-fired power generation for AI data centers. As a result, Chevron should have plenty of fuel to continue growing its high-yielding dividend.
Clearway Energy
Clearway Energy (NYSE: CWEN)(NYSE: CWENA) is a leading clean power company. It sells the electricity it produces under long-term, fixed-rate contracts, enabling it to generate very stable cash flow to support its 4.7% yielding dividend. Clearway's growing dividend has enabled it to deliver a powerful 340% total return (16.2% annualized) over the last 10 years.
The clean power company expects to grow its cash flow per share by 7% to 8% annually through 2030 and by 5% to 8%+ per year thereafter. That should give it plenty of power to continue increasing its high-yielding dividend. Clearway has ample growth drivers, including acquiring renewable energy assets, increasing the capacity of its existing assets, and rising power prices.
Williams
Williams (NYSE: WMB) is a natural gas pipeline giant. It generates very stable cash flow backed by long-term contracts and government-regulated rate structures. William's stable business model has enabled it to pay dividends for more than 50 years. It currently offers a 3% yield and has generated a monster 570% total return (21% annualized) over the last 10 years.
The company is investing heavily to develop new gas infrastructure to support rising demand. In addition to building new gas pipelines, Williams is investing in a liquefied natural gas export terminal and several gas-fired power plants. These investments should drive more than 10% compound annual earnings growth through at least 2030. Meanwhile, it has several more projects under development to extend its growth outlook. That should give Williams plenty of fuel to continue increasing its dividend.
Automate your portfolio
Chevron, Clearway Energy, and Williams should continue to grow their high-yielding dividends in the coming years. That makes them great stocks to buy, set up dividend reinvestment plans, and forget for the next decade or so. Doing so could be a richly rewarding strategy.
Matt DiLallo has positions in Chevron and Clearway Energy. The Motley Fool has positions in and recommends Chevron. The Motley Fool has a disclosure policy.