Passive income is a great way to supplement your earnings without having to actively work for it. One popular method of generating passive income is through investing in dividend stocks. These stocks pay out a portion of their earnings to shareholders in the form of dividends, providing a steady stream of income over time. Two companies that offer attractive dividend yields are Energy Transfer and Clearway Energy.
Energy Transfer, a midstream energy company, currently boasts a dividend yield of 6.2%. This means that for every $100 invested in the company, investors can expect to receive $6.20 in passive income annually. Compared to the S&P 500’s average dividend yield of 1.2%, Energy Transfer’s yield is significantly higher. The company generates stable cash flow from fee-based contracts with energy companies, ensuring the sustainability of its dividend payments. With a conservative payout ratio and a strong balance sheet, Energy Transfer is well-positioned to continue growing its dividend in the future.
In addition to its existing projects, Energy Transfer has a robust pipeline of expansion projects in development, including the recently approved $2.7 billion Hugh Brinson Pipeline. The company also has a history of making accretive acquisitions, further enhancing its growth prospects. With a projected annual distribution growth of 3% to 5%, Energy Transfer offers investors the opportunity to earn a growing stream of passive income.
Clearway Energy, on the other hand, is a clean energy infrastructure company that currently offers a dividend yield of 6.5%. The company generates stable cash flow from long-term, fixed-rate power purchase agreements with utilities and corporate customers. Clearway Energy has been strategically investing in renewable energy projects, steadily growing its cash flow and dividend payouts. With a targeted dividend growth rate of 6.8% this year and a 6.5% increase in 2026, Clearway Energy is committed to providing investors with a growing stream of passive income.
Looking ahead, Clearway Energy plans to continue investing in new renewable energy projects to support 5% to 8% annual dividend growth. By retaining cash after paying dividends and maintaining a prudent payout ratio, the company aims to sustain its dividend growth trajectory in the years to come. With the increasing demand for renewable energy, Clearway Energy is well-positioned to capitalize on new investment opportunities and deliver value to its shareholders.
In conclusion, both Energy Transfer and Clearway Energy offer investors the opportunity to earn attractive dividend yields and grow their passive income over time. By investing in these companies, individuals can benefit from a steady stream of income without having to actively manage their investments. As always, it’s important to conduct thorough research and consider your own financial goals before making any investment decisions.
