These Dividend Stocks Can Double Your Money in 6 Years

Compound interest is a powerful wealth creator. For example, an investment that can achieve an annual rate of return of 13% will double in value within 6 years. 13% is an above-average return, but many blue-chip dividend stocks have delivered average annual total returns above that level over the past decade (and are likely to continue doing so).

Prologis (PLD 0.17%) and Brookfield Renewable (BEPC -1.84%) (BEP -1.79%) High performance dividend stocks. They should have the drive to double investors’ money within six years.

REITs that create wealth

Prologis has an impressive average annual return of 16.8%. total return Rapidly increasing dividends have been a major driver for major companies over the past decade (16.7% over the past six years). Industrial REIT Powerful performance. Prologis has grown its dividend at a compound annual rate of 12% over the past five years, supported by a similar growth rate of core funds from its operations (FFO). This is twice the average dividend growth rate of other REITs and companies worldwide. S&P500.

The warehouse giant is well-positioned to continue growing its core FFO and dividends at a high rate. The REIT expects core FFO per share to increase 9% to 11% annually through at least 2026 due to rental growth and development projects. There is a positive side to that prediction. Over the past several years, the company has increased its FFO per share by an average of 1.5% annually through aggressive acquisitions. Prologis has a strong balance sheet, giving it plenty of financial flexibility to make new investments.

Prologis’ forecasts (and recent track record) suggest the REIT could grow its dividend in line with core FFO, potentially increasing its 2.7% yield dividend by around a double-digit annualized rate. suggests. This should give it the power to generate annual total returns of about 12% at the low end and more than 15% at the high end if the acquisitions are in line with recent averages.

Accelerate your wealth creation potential

Brookfield Renewable has generated an impressive total return of 13.4% per year on average over the past 10 years (13.1% over the past 6 years).global Renewable energy Juggernaut has grown FFO per share at an average rate of more than 10% per year over the past decade. This allowed the dividend to grow at a compound annual rate of 6%.

The company is likely to grow even faster in the coming years.

Image source: Brookfield Renewable.

As this slide shows, three types of organic catalysts have the potential to grow FFO per share by 7% to 12% annually until at least 2028. On top of that, Brookfield sees mergers and acquisitions (M&A) that could increase his FFO per share by more than 9%. I share it every year. This easily supports the company’s plan to increase its dividend by 5% to 9% annually.

Several factors are driving Brookfield’s strong M&A potential. On the other hand, they have abundant access to capital. Brookfield Renewable regularly recycles capital by selling maturing assets and using the proceeds to fund new high-return investments. On that basis, the company and its parent company Brookfield Asset Management, with its growing Brookfield Global Transition Fund (BGTF) platform. Both companies are working toward the conclusion of the second BGTF, which aims to raise approximately $20 billion. That’s about $5 billion more than the record $15 billion raised in its first fund.

On the other hand, new investment opportunities abound. While the company acquired an Australian power company, origin energy Chief Executive Officer Conor Teskey said that although the company failed to win shareholder support, “there is ample opportunity to deploy capital beyond our target returns.” This gives the company confidence that it will achieve its goal of putting between $7 billion and $8 billion of its own capital into new investments over the next five years, some of it through his BGTF. I did.

With a dividend yield of approximately 4.6% and the potential for annual FFO growth of over 10% per share, Brookfield should have no trouble achieving its long-term goal of generating average annual gross returns of 12% to 15%.

Visible path to total return in the low 10% range

Prologis and Brookfield Renewables have delivered total returns of over 13% annually over the past 10 years. They are in a position to match (or exceed) that percentage in the coming years. If these dividend stocks materialize, investors’ money will double within six years. That makes it a great stock to buy now for anyone looking to grow their wealth over the next few years.