Key Points

• Dividend stocks are a useful source of extra income.

• The best dividend stocks, however, also increase payouts over time and can build you a fortune.

• The S&P 500 index has some top-notch dividend stocks, some of which are no-brainer buys now.

• 10 stocks we like better than Medtronic ›

Dividend stocks are one of the most powerful wealth compounders. The S&P 500 (SNPINDEX: ^GSPC) index offers the perfect example. Over the past 25 years, while the S&P 500 rose by over 300%, its total returns crossed 550% thanks to reinvested dividends.

As you may guess, the S&P 500 comprises some of the best dividend stocks out there, many of which have been multibaggers and have the potential to continue being so. Here are 10 such magnificent S&P 500 dividend stocks -- trading at least 10% below their all-time highs -- to buy now and hold forever.

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Johnson & Johnson: down 11.5%, yield 3.4%

Johnson & Johnson (NYSE: JNJ) is a cash-flow machine. It generated $95 billion in free cash flow (FCF) over the past five years and returned 60% of it to shareholders. The stock is also a dividend powerhouse, increasing its dividend for 62 consecutive years. Johnson & Johnson has robust financials, invests heavily in research and development, and has big plans for both its businesses, pharmaceuticals and medical technology, making it a top S&P 500 dividend stock to buy and hold.

ExxonMobil: down 11.6%, yield 3.7%

ExxonMobil (NYSE: XOM) is one of the world's largest oil and gas companies. In 2024, the oil and gas giant generated $55 billion in cash flow from operations, compared to $30 billion in 2019. ExxonMobil is a dividend behemoth with a 42-year streak of consecutive dividend increases. After its $60 billion acquisition of Pioneer Natural Resources in 2023, ExxonMobil has been targeting higher production at even lower costs and focusing on boosting its cash flows, all of which makes this magnificent S&P 500 dividend stock a buy at every dip.

Procter & Gamble: down 14%, yield 2.7%

Procter & Gamble (NYSE: PG) owns over 60 brands, most of which are household names today. Although its organic sales growth has slowed due to higher costs and weak consumer sentiment, it's just a short-term blip. Procter & Gamble is restructuring operations and targeting core earnings per share by mid- to high-single-digit percentages in the long term by exiting low-margin brands and markets. Above all, Procter & Gamble has a strong balance sheet and is a Dividend King, having increased its dividend for 69 consecutive years.

NextEra Energy: down 19%, yield 3.3%

NextEra Energy (NYSE: NEE) operates the largest electric utility in America (Florida Power & Light), which generates steady cash flows. It is also the world's largest producer of wind and solar energy, as well as a key player in battery storage, all of which are growth drivers. NextEra Energy stock has increased its dividend for over 20 years and has generated humongous returns for investors who reinvested the dividends. The global shift to renewables and a massive pipeline make NextEra Energy a no-brainer S&P 500 dividend stock to buy and hold forever.

NEE data by YCharts.

Chevron: down 19%, yield 4.8%

Chevron (NYSE: CVX) is one of the largest integrated oil companies, operating across the entire value chain, from exploration and production to pipelines, refining, chemicals, and marketing. Chevron has massive oil and gas reserves but is also growing new low-carbon businesses, such as hydrogen and renewable fuels. Chevron has increased its dividend for 38 consecutive years, making it one of the best oil dividend stocks within the S&P 500. Chevron also just won a dispute with ExxonMobil and has acquired Hess in a massive $53 billion deal.

American Water Works: down 24%, yield 2.4%

American Water Works (NYSE: AWK) is the largest regulated water and wastewater utility in the U.S., serving over 14 million customers and 18 military bases.

AWK data by YCharts.

While generating stable cash flows from these regulated and contracted businesses, American Water Works' regular investments in its infrastructure help it secure base rate hike approvals, which continue to drive its earnings, cash flows, and dividends higher. American Water Works is targeting 7% to 9% annual dividend growth for the long term, making it an incredibly safe S&P 500 dividend stock to buy now and hold forever.

Realty Income: down 29%, yield 5.6%

Realty Income (NYSE: O), a real estate investment trust (REIT), pays a dividend every month and has increased it for 110 consecutive quarters now. The company owns over 15,000 properties globally and leases them under triple-net leases, where the tenants bear most of the costs. So, Realty Income enjoys high margins, and its diverse portfolio enables the company to navigate economic challenges. Realty Income's commitment to paying a monthly and growing dividend makes it one of the top 10 dividend stocks to double up on now and hold.

Oneok: down 29%, yield 5%

Oneok (NYSE: OKE) is one of the largest energy infrastructure companies in the U.S., with a network of pipelines spanning 60,000 miles. Three big acquisitions over the past couple of years or so, including that of Magellan Midstream Partners, combined with organic expansions, should help Oneok steadily grow earnings and meet its goal of increasing the annual dividend by 3% to 4%. When coupled with a 5% yield, Oneok makes for an appealing S&P 500 dividend stock to buy and hold.

Nucor: down 30%, yield 1.7%

Nucor (NYSE: NUE) is America's largest and most diversified steel company. It is also vertically integrated, meaning it sources the bulk of its raw material in-house. That's a huge competitive advantage to have in a commodity business and one of the key factors behind Nucor's strong financials and dividend growth. Nucor aims to return at least 40% of its earnings to shareholders, has increased its dividend for 52 straight years, and is primed to benefit from President Donald Trump's steep tariffs on steel imports.

NUE data by YCharts.

Medtronic: down 33%, yield 3.3%

With revenue of $33.5 billion for the fiscal year that ended April 25, 2025, Medtronic (NYSE: MDT) is the world's largest medical device manufacturer. It offers a wide range of products across cardiovascular, neuroscience, medical-surgical, and diabetes care and uses artificial intelligence and robotics technologies to build better products. Medtronic plans to divest its diabetes business into a separate company to unlock more value for shareholders. Meanwhile, it is only two dividend raises away from becoming a Dividend King, making this S&P 500 dividend stock a solid buy.

Should you invest $1,000 in Medtronic right now?

Before you buy stock in Medtronic, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Medtronic wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $652,133!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,056,790!*

Now, it’s worth noting Stock Advisor’s total average return is 1,048% — a market-crushing outperformance compared to 180% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

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*Stock Advisor returns as of July 15, 2025

Neha Chamaria has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Chevron, NextEra Energy, and Realty Income. The Motley Fool recommends Johnson & Johnson, Medtronic, and Oneok and recommends the following options: long January 2026 $75 calls on Medtronic and short January 2026 $85 calls on Medtronic. The Motley Fool has a disclosure policy.

Key Points

• The energy sector is volatile, but some companies are built to survive that volatility.

• Chevron has a lofty yield and a long history of returning value to investors via dividend hikes.

• TotalEnergies has a lofty yield and a business that is changing with the world around it.

• 10 stocks we like better than Chevron ›

Chevron (NYSE: CVX) is offering investors a 4.7% dividend yield today. TotalEnergies' (NYSE: TTE) yield is even higher at 6.3%. That compares to an energy industry average of just 3.5%. But lofty yields are just one reason to like Chevron and TotalEnergies. Here are a few more that may prompt you to buy one or both of these energy industry giants right now.

Chevron and TotalEnergies are integrated

The one thing every investor needs to understand about the energy sector right up front is that it is inherently volatile. Oil and natural gas are commodities, and their prices swing widely and quickly. That's why I prefer to invest in the energy sector via integrated energy stocks. Most conservative investors, and likely most income investors, should probably follow my lead.

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Chevron and TotalEnergies basically have exposure to the entire value chain, from production to transportation, chemicals, and refining. Each segment of the industry operates a little differently, with the diversification across the sector helping to soften the fluctuations in energy prices. To be fair, commodity prices are still the driving force behind Chevron's and TotalEnergies' businesses and stock prices. But integrated energy companies tend to weather the swings better than pure-play drillers and chemical and refining companies.

Chevron has a great dividend record and a solid foundation

That said, Chevron and TotalEnergies are not interchangeable. For example, Chevron has increased its dividend annually for 38 consecutive years. TotalEnergies hasn't managed anything near that level of dividend consistency (more on TotalEnergies' dividend below). Part of the reason for Chevron's dividend success is its focus on operating with a strong balance sheet.

At the end of the first quarter of 2025, Chevron's debt-to-equity ratio was roughly 0.2 times. That's low for any company and is second-best among its closest peers. That gives management the leeway to take on debt during industry weak patches so it can continue to support its business and pay its dividend. When oil prices recover, as they always have historically, leverage is reduced in preparation for the next downturn.

For more conservative dividend investors, Chevron is a solid choice in the energy sector. There will be ups and downs, but the dividend is highly reliable.

TotalEnergies is focused on change

That said, I own TotalEnergies. There are a couple of caveats here, though. First, U.S. investors must pay French taxes on the dividends collected, which reduces the actual income stream they'll receive. Second, TotalEnergies has a history of investing more aggressively. That includes investments in politically volatile countries and, right now, in the development of clean energy. Chevron has largely stuck to its energy core.

The clean energy investments being made are why I've chosen to own TotalEnergies. Essentially, the French energy giant is using its carbon fuel profits to invest in the energy transition that is shifting the world more and more toward electricity. This is going to be a decades-long shift, and an all-of-the-above approach is likely to be the final solution on the energy front. However, I like that TotalEnergies is working on an all-of-the-above strategy right now.

What really sets TotalEnergies apart, however, is that it has made this transition without cutting its dividend (it has actually been increasing it annually of late). European peers BP and Shell announced similar plans and used the business shift to justify dividend cuts. Then, they both walked back their clean energy plans. TotalEnergies has, if anything, sped up its investments in the space.

In other words, TotalEnergies is executing well in a changing world, which is exactly why I want to own it for the long term.

Energy prices have been weak

The interesting thing about both Chevron and TotalEnergies is that oil prices have been relatively weak of late. And that has put downward pressure on each company's shares, lifting their yields to fairly attractive levels. For more conservative dividend investors, Chevron is probably the better choice. But for investors like me who are willing to take on a little more risk to gain exposure to clean energy, TotalEnergies could be a good call right now, too.

Should you invest $1,000 in Chevron right now?

Before you buy stock in Chevron, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Chevron wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $687,764!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $980,723!*

Now, it’s worth noting Stock Advisor’s total average return is 1,048% — a market-crushing outperformance compared to 179% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of July 7, 2025

Reuben Gregg Brewer has positions in TotalEnergies. The Motley Fool has positions in and recommends Chevron. The Motley Fool recommends BP. The Motley Fool has a disclosure policy.

Key Points

• Buffett's Berkshire Hathaway portfolio includes only one ultra-high-yield stock.

• However, his "secret portfolio" is loaded with ultra-high-yielders.

• The best of the bunch has increased its dividend for 30 consecutive years and has solid growth prospects.

Warren Buffett is known as a value investor, not as an income investor. However, that doesn't mean the "Oracle of Omaha" doesn't own stocks that many income investors would find highly attractive.

You might be surprised that Buffett even has positions in nine ultra-high-yield dividend stocks. By the way, the threshold used for a dividend yield to qualify as "ultra-high" is four times the yield of the SPDR S&P 500 ETF. Here are all of Buffett's ultra-high-yield dividend stocks, along with which one is the best of the bunch.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

Berkshire Hathaway's sole ultra-high-yielder

Buffett's Berkshire Hathaway portfolio features only one ultra-high-yield dividend stock: Kraft Heinz (NASDAQ: KHC). The food and beverage company pays a forward dividend yield of 6%.

Kraft Heinz's dividend yield isn't so high because the company has increased its dividend payout. Instead, it's the result of a steadily deteriorating share price over the last few years, combined with maintaining the dividend at the same level during the period.

Berkshire does have stakes in a couple of other stocks with yields that aren't too far away from meeting the ultra-high threshold. Oil and gas giant Chevron offers a forward dividend yield of 4.61%. Satellite radio and podcast provider Sirius XM Holding's yield is 4.45%. However, the stocks didn't quite make the cut for our list.

Buffett's "secret portfolio"

Where can Buffett's other seven ultra-high-yield dividend stocks be found? In his "secret portfolio." I'm referring to the stocks owned by New England Asset Management (NEAM).

Berkshire Hathaway acquired General Re in 1998, which had acquired NEAM three years earlier. While NEAM reports its stock holdings to the U.S. Securities and Exchange Commission separately from Berkshire, Buffett owns all of the stocks in its portfolio just as much as he does any stock listed in Berkshire's SEC filings.

NEAM's two highest-yielding stocks are both business development companies (BDCs). Globus Capital BDC (NASDAQ: GBDC) pays an especially juicy forward dividend yield of 11.17%. It's followed by Ares Capital, the largest publicly traded BDC, with a yield of 8.57%.

A couple of big pharma stocks in Buffett's secret portfolio pay great dividends. Pfizer's (NYSE: PFE) forward dividend yield is 6.78%, while Bristol Myers Squibb (NYSE: BMY) offers a forward yield of 5.29%.

There's one ultra-high-yield overlap between Berkshire's and NEAM's portfolios -- Kraft Heinz. NEAM also owns another food company with an exceptionally high dividend payout. Campbell's (NASDAQ: CPB), which is best known for its soups, pays a forward dividend yield of 4.99%.

Two real estate investment trusts (REITs) are also in the mix. Realty Income's (NYSE: O) forward dividend yield is 5.6%. Lamar Advertising's (NASDAQ: LAMR) yield is 4.99%.

Finally, Buffett owns a stake in telecommunications giant Verizon Communications (NYSE: VZ) via NEAM's portfolio. Verizon's forward dividend yield is a lofty 6.22%.

The best of the bunch

How can we determine which of these ultra-high-yield dividend stocks owned by Buffett is the best of the bunch? We should obviously consider the dividend yield. In addition, the ability of the company to continue paying (and preferably increasing) its dividend is important. Growth prospects and valuation should be included, too. Based on these criteria, I think three of the nine stocks stand out above the rest.

Ares Capital's sky-high yield is a big plus. The BDC has either maintained or grown its dividend for 63 consecutive quarters (almost 16 years). It's the leader in the fast-growing private capital market. Ares Capital has also trounced the S&P 500 since its initial public offering in 2004.

Verizon is a longtime favorite for income investors. Its juicy dividend appears to be safe with the company's growing free cash flow. Verizon has also increased its dividend for 18 consecutive years. The biggest knock against the telecom provider is that its revenue and earnings growth haven't been spectacular. However, Verizon could enjoy stronger growth going forward once its acquisition of Frontier Communications closes.

The best stock overall of the group, in my opinion, is Realty Income. Its dividend yield is very attractive. Even better, the REIT pays its dividend monthly and has increased its dividend for an impressive 30 consecutive years.

Realty Income has delivered a positive total operational return every year since its IPO in 1994. Its diversified real estate portfolio, with nearly 1,600 clients representing 91 industries, helps make the company's cash flow stable. The REIT also has strong growth prospects, particularly in Europe, where it faces minimal competition.

The main drawback with this stock is its valuation. Realty Income's shares trade at 43 times forward earnings. However, I think the company's sterling track record justifies a premium price tag.

Should you invest $1,000 in Realty Income right now?

Before you buy stock in Realty Income, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Realty Income wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $699,558!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $976,677!*

Now, it’s worth noting Stock Advisor’s total average return is 1,060% — a market-crushing outperformance compared to 180% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 30, 2025

Keith Speights has positions in Ares Capital, Berkshire Hathaway, Bristol Myers Squibb, Chevron, Pfizer, Realty Income, and Verizon Communications. The Motley Fool has positions in and recommends Berkshire Hathaway, Bristol Myers Squibb, Chevron, Pfizer, and Realty Income. The Motley Fool recommends Campbell's, Kraft Heinz, and Verizon Communications. The Motley Fool has a disclosure policy.

Key Points

• Chevron currently has a dividend yield above 4.5%.

• The oil giant has the lowest breakeven level in the industry and a fortress financial profile.

• It has plenty of fuel to continue increasing its dividend.

The Dow Jones Industrial Average tracks 30 of the most prominent companies in the country. These mature companies are very profitable, which allows many of them to pay generous dividends. The index currently has a 1.8% dividend yield, which is higher than the S&P 500's 1.3% and the Nasdaq-100's 0.8%.

The Dow is fertile ground for those seeking dividend income. It holds several higher-yielding dividend stocks with an excellent track record of increasing their payouts. One that stands out for income seekers this July is Chevron (NYSE: CVX). Here's why it's a great Dow stock to buy this month for passive income.

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A bankable, high-octane income stream

Chevron's dividend yield is currently over 4.5%. A high dividend yield can sometimes be a warning sign that the payout isn't sustainable. However, that's not the case with Chevron.

The oil giant has built a highly resilient portfolio. The company's business currently has a breakeven level of around $30 per barrel, the lowest in the industry. With crude oil prices in the mid-$60s, Chevron is generating a substantial amount of free cash flow. It produced $15 billion in free cash flow last year after funding capital expenditures of $16.4 billion and another $3.7 billion in the first quarter of 2025. With its dividend costing $3 billion a quarter, Chevron has an ample cushion.

Chevron also has an elite balance sheet. Its leverage ratio was a low 14% at the end of the first quarter. That's well below its 20%-25% target range and toward the low end of its peer group's range.

The company's combination of a low breakeven level and fortress balance sheet puts Chevron's high-yielding dividend on a firm foundation.

The fuel to grow

Chevron has been investing heavily in high-return capital projects, which are driving growth in its production and free cash flow. The company and its partners recently completed the Future Growth Project in Kazakhstan and the Ballymore project in the Gulf of Mexico, also known as the Gulf of America in the United States. It has more projects in the Gulf and the Eastern Mediterranean that should come online soon. In addition, the company is developing its assets in the Permian and DJ basins in the U.S. Chevron estimates that its current slate of growth projects puts it on track to add an incremental $9 billion in annual free cash flow by next year, assuming a $60 oil price.

On top of that, the company is waiting to close its mega deal for Hess. It agreed to buy the fellow oil and gas producer in late 2023 for $60 billion. A dispute with ExxonMobil over Hess' stake in their lucrative development offshore Guyana is currently holding up the transaction.

The case has gone to arbitration, with a ruling expected soon. Chevron is so confident it will win that it spent $2.2 billion to buy nearly 5% of Hess' outstanding shares on the open market earlier this year. Winning the case will allow it to close the needle-moving deal, which will extend its production and free cash flow growth outlook into the 2030s.

Even if it loses its case and can't close that deal, Chevron has plenty of growth ahead. As a result, the company's dividend growth engine won't run out of gas. The oil giant has increased its payout for 38 consecutive years, a period spanning multiple commodity price cycles. The company has delivered peer-leading dividend growth over the past decade.

A well-oiled, dividend-paying machine

Chevron currently offers investors an attractive dividend yield due to the uncertainty over the fate of its Hess acquisition and the volatility of commodity prices. However, the company has a highly resilient portfolio and a fortress financial profile, which puts its high-yielding dividend on rock-solid ground. Meanwhile, it has lots of fuel to grow, even if it can't close its deal for Hess. Those features make it a great Dow stock to buy this July for a lucrative and growing stream of passive dividend income.

Should you invest $1,000 in Chevron right now?

Before you buy stock in Chevron, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Chevron wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $699,558!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $976,677!*

Now, it’s worth noting Stock Advisor’s total average return is 1,060% — a market-crushing outperformance compared to 180% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 30, 2025

Matt DiLallo has positions in Chevron. The Motley Fool has positions in and recommends Chevron. The Motley Fool has a disclosure policy.

Key Points

• Warren Buffett tends to buy well-run companies and hold them for the long term.

• Even well-run companies fall out of favor on Wall Street.

• With a 4.7% yield, this high-yield stock is built to survive whatever comes its way.

Warren Buffett has built an incredible track record running Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B). And he did it using simple-to-understand logic: Buy well-run companies when they look attractively priced and then hold for the long term (so you can benefit from the growth of the business over time). But even well-run companies fall out of favor, and that's why this Buffett stock, with a lofty 4.7% dividend yield, is worth buying in July.

Two oil picks with different industry approaches

Energy stocks are currently suffering through a period of volatility thanks to geopolitical tensions. That's not unusual at all. The energy market is known for being volatile, and so are most stocks in the energy sector. Buffett has two energy investments, Occidental Petroleum (NYSE: OXY) and Chevron (NYSE: CVX). They have materially different industry positions.

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Oxy, as it is more commonly known, is focused on growing its business as quickly as practicable so it can better compete with established industry giants like, well, Chevron. Chevron, an industry giant, is focused on slow growth and -- here's the key for investors -- surviving through the inherent ups and downs of the energy sector. The second bit is why Chevron is so attractive as July gets underway.

There are three parts to Chevron's story. The one that will likely be most interesting to investors is its reliable dividend. The integrated energy giant has increased its dividend year in and year out for 38 consecutive years. That's an incredible streak given the price swings that have occurred in oil over that span. The company is, clearly, focused on rewarding investors for sticking around.

The interesting part is that this reliable dividend stock's dividend yield gets attractive during the tough times. Right now is a tough time thanks to both industry issues and some company-specific problems. History suggests Chevron will muddle through and continue to pay its dividend. In the meantime, investors can collect a hefty 4.7% dividend yield.

What backs Chevron's lofty yield?

A big yield that gets reliably paid is nice, but it doesn't fully explain why Buffett has Chevron in Berkshire Hathaway's portfolio. Which is where the next two parts of the Chevron story come in.

First, Chevron is an integrated energy giant. That means that it has exposure to the entire energy value chain, from producing oil and natural gas, to transporting the commodities, to processing them into other products. Each segment works a little differently through the energy cycle. Having exposure to all of them helps to smooth out performance over time. On top of that diversification, Chevron also has a global portfolio. So it can shift its investments to where they will have the best opportunity for success.

CVX Debt to Equity Ratio data by YCharts

That's a solid start, but there's another important factor. Chevron also has one of the strongest balance sheets in the energy patch, with a debt-to-equity ratio of just 0.2 times. That gives management the leeway to add debt during industry downturns so it can continue to support the business and dividend through hard times. When commodity prices recover, as they always have historically, it pays down its debt in preparation for the next downturn.

Buy Chevron when others are selling the stock

Chevron's stock is down around 20% from its 2022 highs, when oil prices were much higher. Long-term dividend investors shouldn't get too hung up on the downturn or the reasons why. Chevron is built to survive whatever comes its way. It probably makes more sense to just follow Buffett's "simple" approach and buy this well-run company while it is attractively priced and then hold it for the long term.

Should you invest $1,000 in Chevron right now?

Before you buy stock in Chevron, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Chevron wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $699,558!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $976,677!*

Now, it’s worth noting Stock Advisor’s total average return is 1,060% — a market-crushing outperformance compared to 180% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 30, 2025

Reuben Gregg Brewer has positions in TotalEnergies. The Motley Fool has positions in and recommends Berkshire Hathaway and Chevron. The Motley Fool recommends BP and Occidental Petroleum. The Motley Fool has a disclosure policy.

Key Points

• SCHD and GCOW focus on higher-yielding dividend stocks.

• The ETFs have different strategies for selecting those stocks.

• They also have different fees and return profiles.

Many exchange-traded funds (ETFs) focus on holding dividend-paying stocks. While that gives income-seeking investors lots of options, it can make it difficult to know which is the best one to buy.

The Schwab U.S. Dividend Equity ETF (NYSEMKT: SCHD) and Pacer Global Cash Cows Dividend ETF (NYSEMKT: GCOW) are two notable dividend ETFs. Here's a look at which is the better one to buy for those seeking to generate passive income.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

Different strategies for selecting high-yielding dividend stocks

The Schwab U.S. Dividend Equity ETF and the Pacer Global Cash Cows Dividend ETF aim to provide their investors with above-average dividend income by holding higher-yielding dividend stocks. The ETFs each hold roughly 100 dividend stocks. However, they use different strategies to select their holdings.

The Schwab U.S. Dividend Equity ETF aims to track the returns of the Dow Jones U.S. Dividend 100 Index. That index screens U.S. dividend stocks based on four quality characteristics:

• Cash flow to debt.
• Return on equity (ROE).
• Indicated dividend yield.
• Five-year dividend growth rate.

The index selects companies that have stronger financial profiles than their peers. That should enable them to deliver sustainable and growing dividends, and the Schwab U.S. Dividend ETF accordingly provides investors with a higher-yielding current dividend that should grow at an above-average rate. At its annual reconstitution, its 100 holdings had an average dividend yield of 3.8% and a five-year dividend growth rate of 8.4%.

The Pacer Global Cash Cows Dividend ETF uses a different strategy for selecting its 100 high-yielding dividend stocks. It starts by screening the 1,000 stocks in the FTSE Developed Large-Cap Index for the 300 companies with the highest free cash flow yield over the past 12 months. It screens those stocks for the 100 highest dividend yields. It then weights those 100 companies in the fund from highest yield to lowest, capping its top holding at 2%. At its last rebalance, which it does twice a year, its 100 holdings had an average free cash flow yield of 6.3% and a dividend yield of 5%.

Here's a look at how the top holdings of these ETFs currently compare:

SCHD	GCOW
ConocoPhillips, 4.4%	Phillip Morris, 2.6%
Cisco Systems, 4.3%	Engie, 2.6%
Texas Instruments, 4.2%	British American Tobacco, 2.4%
Altria Group, 4.2%	Equinor, 2.2%
Coca-Cola, 4.1%	Gilead Sciences, 2.2%
Chevron, 4.1%	Nestle, 2.2%
Lockheed Martin, 4.1%	AT&T, 2.2%
Verizon, 4.1%	Novartis, 2.1%
Amgen, 3.8%	Shell, 2.1%
Home Depot, 3.8%	BP, 2%

Data sources: Schwab and Pacer.

Given their different strategies for selecting dividend stocks, the funds have very different holdings. SCHD holds only companies with headquarters in the U.S., while GCOW takes a global approach. U.S. stocks make up less than 25% of its holdings. Meanwhile, SCHD weights its holdings based on their dividend quality, while GCOW weights them based on dividend yield. Given its focus on yield, GCOW offers investors a higher current income yield at 4.2%, compared with 3.9% for SCHD.

Costs and returns

While SCHD and GCOW focus on higher-yielding dividend stocks, their strategies in selecting holdings have a major impact beyond the current dividend income. Because SCHD is a passively managed ETF while GCOW is an actively managed fund, SCHD has a much lower ETF expense ratio than GCOW. SCHD's is just 0.06%, compared with GCOW's 0.6%. Put another way, every $10,000 invested would incur $60 in management fees each year if invested in GCOW, compared with only $6 in SCHD.

GCOW's higher fee really eats into the income the fund generates, which affects its returns over the long term. The fund's current holdings actually have a 4.7% dividend yield, whereas the fund's latest payout had only a 4.2% implied yield.

ETF	1-Year	3-Year	5-Year	10-Year	Since Inception
GCOW	11.2%	8.4%	15.5%	N/A	8.8%
SCHD	3.8%	3.7%	12.2%	10.6%	12.2%

Data sources: Pacer and Schwab. Note: GCOW's inception date is 2/22/16, while SCHD's is 10/20/11.

GCOW has outperformed SCHD over the past five years. However, SCHD has delivered better performance over the longer term. That's due to its lower costs and focus on companies that grow their dividends, which tend to produce the highest total returns over the long term.

SCHD is a better ETF for passive income

SCHD and GCOW hold higher-yielding dividend stocks, making either ETF ideal for those seeking passive income. However, SCHD stands out as the better one to buy because of its focus on dividend sustainability and growth. It also has a much lower ETF expense ratio. So it should provide investors with an attractive and growing stream of passive dividend income.

Should you invest $1,000 in Schwab U.S. Dividend Equity ETF right now?

Before you buy stock in Schwab U.S. Dividend Equity ETF, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Schwab U.S. Dividend Equity ETF wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $692,914!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $963,866!*

Now, it’s worth noting Stock Advisor’s total average return is 1,050% — a market-crushing outperformance compared to 179% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

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Matt DiLallo has positions in Chevron, Coca-Cola, ConocoPhillips, Gilead Sciences, Schwab U.S. Dividend Equity ETF, and Verizon Communications. The Motley Fool has positions in and recommends Amgen, Chevron, Cisco Systems, Gilead Sciences, and Texas Instruments. The Motley Fool recommends BP, British American Tobacco, Equinor Asa, Lockheed Martin, Nestlé, Philip Morris International, and Verizon Communications and recommends the following options: long January 2026 $40 calls on British American Tobacco and short January 2026 $40 puts on British American Tobacco. The Motley Fool has a disclosure policy.

Oil and natural gas prices can move in unexpected ways and do so in a dramatic and rapid fashion. The geopolitical conflicts playing out today are yet another evidence point that energy investors need to be prepared to deal with often headline-grabbing and perhaps shocking volatility.

If you are looking for a high-yield energy stock today, you'll be better off sticking with a reliable giant like Chevron (NYSE: CVX) or attempting to sidestep energy prices with an investment in a midstream giant like Enterprise Products Partners (NYSE: EPD). Here's what you need to know.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

1. Chevron gives you direct exposure to energy

If what you are really looking for is some exposure to oil and natural gas, then Chevron and its roughly 4.7% dividend yield could be for you. A $1,000 investment will net you around six or seven shares today. The big story here, however, is the impressive history of dividend growth, with dividend increases in each of the last 38 years.

Oil and natural gas prices have gone through many dramatic swings over that span, and still, Chevron has remained committed to supporting its dividend. It is built to survive such energy market swings. For starters, its business is diversified across the energy sector and geographically. Having exposure to the upstream (energy production), the midstream (pipelines), and the downstream (chemicals and refining) helps to soften the peaks and valleys since each segment operates a little differently through the energy cycle. Having exposure to various global energy markets on the supply and demand side allows Chevron to focus its investments in the areas with the highest returns.

Then there's the energy giant's balance sheet, which is rock solid. With a debt-to-equity ratio of around 0.2x, it has notably less leverage than most of its closest peers. This gives management the leeway to take on debt during industry weak spots so it can continue to support its business and dividend. When oil prices recover, as they always have historically, Chevron simply reduces its leverage to prepare for the next industry downturn.

Playing it as safe as possible with high-yield Chevron is a good call for dividend investors that want more direct oil exposure.

2. Enterprise Products Partners shifts the energy playbook

But you don't have to have direct exposure to oil prices if you want to invest in dividend-paying energy stocks. That's because the midstream segment is the one part of the energy industry that works a little differently. Businesses like Enterprise Products Partners own the energy infrastructure, like pipelines, that move oil, natural gas, and the products into which they get turned around the world.

What sets the midstream apart from the upstream and the downstream is that the midstream largely charges fees for the use of energy infrastructure assets. In other words, businesses like Enterprise Products Partners are just toll-takers. The volume of products moving through its portfolio of assets is more important than the price of those products. And since energy is so vital to modern life, demand for energy tends to be high regardless of the price of oil. The reliable cash flow Enterprise generates is what supports the master limited partnership's (MLP's) lofty 6.8% distribution yield.

A $1,000 investment in Enterprise will leave you owning around 31 shares of the MLP. But, like Chevron, a key part of the story here is the distribution history. Enterprise has increased its disbursement every year for 26 consecutive years. And, like Chevron, Enterprise is financially strong (it has an investment-grade-rated balance sheet) and conservatively run. The distribution yield will make up the vast majority of your total return here, but if you are trying to maximize the income your portfolio generates, that probably won't bother you.

Two solid energy options for volatile times

Given the current volatility in the energy sector, Chevron and Enterprise are good options for investors right now. But they are usually good options in the energy sector because they are built to deal with the industry's volatility while rewarding investors for sticking around with dividends. If you have $1,000 and you want to add an energy stock, one of these two will be a good dividend-focused pick for your portfolio.

Should you invest $1,000 in Chevron right now?

Before you buy stock in Chevron, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Chevron wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $713,547!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $966,931!*

Now, it’s worth noting Stock Advisor’s total average return is 1,062% — a market-crushing outperformance compared to 177% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 23, 2025

Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Chevron. The Motley Fool recommends Enterprise Products Partners. The Motley Fool has a disclosure policy.

Investing can be extremely volatile, as experienced this year when the market fell into bear market territory from its highs in February. After recouping those losses it's now approaching near all-time highs.

That's why investors may want to consider adding some dividend stocks that can generate reliable passive income each year. There's no better place to look than in the portfolio of Berkshire Hathaway, the conglomerate run by Warren Buffett that has generated market-crushing returns for over six decades. Investing $25,000 in these two Warren Buffett stocks will generate roughly $1,200 in annual passive income.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

Chevron: 4.77% dividend yield

Buffett and his team of investors have been piling into oil and gas stocks in recent years. One of those is the Houston, Texas-based Chevron (NYSE: CVX), which is now the fifth-largest position in Berkshire's massive $283 billion equities portfolio, making up 6% of the portfolio.

Chevron operates extensive upstream and downstream oil operations with a significant presence in the Permian Basin, and plans to ramp up wells and other projects worldwide. In the Permian Basin, Chevron is projecting 5% to 6% compound annual growth in oil production, along with declining capital expenditures that will lead to $2 billion of free cash flow growth by 2026.

Overall, Chevron expects to increase total free cash flow by $9 billion by 2026, assuming Brent Crude Oil per barrel is in the $60 range. Chevron also hopes to further integrate alternative sources of energy in its business, like renewables, hydrogen, and carbon capture and storage, while lowering the carbon intensity of its downstream operations.

In addition, the company is a proven dividend payer, having increased its dividend for 38 straight years and paying an extremely healthy dividend yield of nearly 4.8%. With a 12-month trailing free cash flow yield of nearly 5.3%, Chevron can cover its dividend. Remember, the company expects to significantly increase free cash flow between now and 2026. Furthermore, Chevron is repurchasing $10 billion to $20 billion in stock per year, which is also a way to return capital to shareholders.

Sirius XM: 4.80% dividend yield

The large digital audio operator Sirius XM (NASDAQ: SIRI) has been a dismal investment over the last five years, with the stock down about 59%. The company, which owns Sirius Satellite Radio and the Pandora streaming service, has struggled to grow subscribers amid rising competition from major players like Spotify.

However, Buffett and his team are betting big that management can right the ship, buying up over 35% of outstanding shares. Sirius' management team has a long-term plan to grow subscribers from 40 million to 50 million and free cash flow by 50% from $1.2 billion to $1.8 billion. The plan involves building new in-car technology and launching a new pricing structure. Management also plans to grow its advertising business and has purchased the exclusive advertising and distribution rights of several big-name podcasts.

Seaport Global analyst David Joyce earlier this year noted the company is a relatively safe pick for investors concerned about tariffs because it has a sticky subscriber base of mainly U.S. consumers. Furthermore, ad revenue still only makes up 20% of Sirius' business and could provide a runway for growth.

The company has a high dividend yield of 4.8% and has paid and increased its dividend every year since 2016. Sirius' trailing-12-month free cash flow yield in excess of 12% should make the dividend easy to cover and increase each year, and Sirius is also conducting share repurchases. The turnaround will require patience, but management has a plan; the stock is cheap, trading at less than 8 times forward earnings, and investors will be well compensated while they wait.

Should you invest $1,000 in Chevron right now?

Before you buy stock in Chevron, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Chevron wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $713,547!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $966,931!*

Now, it’s worth noting Stock Advisor’s total average return is 1,062% — a market-crushing outperformance compared to 177% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 23, 2025

Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway, Chevron, and Spotify Technology. The Motley Fool has a disclosure policy.

While Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) sometimes will move in and out of stocks on a short-term basis, the company -- led by famed CEO Warren Buffett -- is largely considered a long-term investor.

This can sometimes make it difficult to immediately understand why Buffett and his team are buying a stock or a group of stocks because their thesis could still be several years away from playing out. The companies they buy may have underperformed recently and also may not screen well.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

In recent years, Buffett and Berkshire have loaded up on energy assets, including oil and gas stocks, even as many industry experts have expressed caution about the price of oil. Does Buffett know something that Wall Street doesn't?

Berkshire's oil and gas acquisitions

Although Berkshire invests in a range of different sectors from banking to tech and artificial intelligence, it's clear that Buffett and his team have been bullish on the energy sector for a number of years now.

In 2020, Berkshire announced it would spend $10 billion (including the assumption of debt) to purchase the natural gas assets from Dominion Energy, which included all of Dominion Energy Transmission, the Questar Pipeline, and Carolina Gas Transmission. The deal also included half of the Iroquois Gas Transmission System and 25% of the natural gas export-import and storage facility Cove Point LNG.

Last October, in a year where Berkshire hardly put any of its massive cash hoard to work, Berkshire announced it would purchase the remaining 8% of Berkshire Hathaway Energy that it didn't already own.

In its massive equities portfolio, Berkshire has also been busy buying domestic U.S. oil and gas stocks. In 2019, Berkshire purchased its first stake in Occidental Petroleum (NYSE: OXY) by providing the company with $10 billion in financing for an acquisition, in return for preferred shares and warrants. Berkshire hasn't slowed its buying since and now owns nearly 27% of outstanding shares. Occidental makes up 4.3% of Berkshire's portfolio and is the company's sixth largest position.

Berkshire also owns nearly 7% of outstanding shares in Chevron (NYSE: CVX), a position it first launched in 2020. Chevron is Berkshire's fifth-largest equity holding.

By all indications, I would expect Berkshire to keep investing in energy and utility stocks and assets. When Buffett retires from the CEO role at the end of this year, Greg Abel will succeed the 94-year-old, and Abel has run Berkshire Hathaway Energy for a number of years.

What does Buffett know?

Occidental Petroleum and Chevron have not performed well since the beginning of 2020, significantly underperforming the broader market.

CVX data by YCharts

Oil prices have struggled over the last several years for a variety of reasons. Prior to President Donald Trump's current administration, there had been more of a focus on alternative energy and electric vehicles, as more people have grown increasingly concerned about climate change and its effect on the world. There have also been concerns about global demand for oil and the supply and demand dynamics.

The Organization of the Petroleum Exporting Countries and its allies have announced plans to increase production in an effort to retain and reclaim market share from countries it believes are producing too much oil. Meanwhile, the U.S. has significantly increased its fracking and drilling production over the last 15 years and saw oil production last year hit a record 13.4 million barrels per day, which also likely had an impact on supply.

Earlier this year, the U.S. Energy Information Administration (EIA) predicted Brent crude oil prices would average about about $66 per barrel this year and about $59 per barrel in 2026, compared to $81 per barrel in 2024.

So why are Buffett and Berkshire so interested in oil and gas assets? One reason may be geopolitical tensions. Relations in the Middle East have been fragile for many decades now. More recently, there has been significant escalation in the region due to the Israel-Gaza war and the growing conflict between Israel and Iran. Following Israel's recent and surprising strike on Iran's nuclear and military facilities, the price of oil surged to one of its highest in years.

Oil and gas are also viewed as finite resources. In a 2023 report, the EIA estimated that there is enough global supply of crude oil, liquid hydrocarbons, and biofuels to power the world's demand for liquid fuels through 2050. While technology can always change things, growth is expected to slow in the Permian Basin, one of the largest sources of oil production in the U.S.

Buffett and the Berkshire team may view holding U.S. energy assets as quite valuable if supply erodes and alternative energy sources can't fill the gap. Or perhaps they view companies like Occidental and Chevron as candidates to move into alternative energy sources.

Either way, it may not be a bad idea for investors to take a page from Buffett's playbook and build some exposure to U.S. oil and energy assets. These can serve as a hedge if oil prices surge due to escalating conflicts in the Middle East or if supply becomes constrained.

Should you invest $1,000 in Berkshire Hathaway right now?

Before you buy stock in Berkshire Hathaway, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Berkshire Hathaway wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $659,171!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $891,722!*

Now, it’s worth noting Stock Advisor’s total average return is 995% — a market-crushing outperformance compared to 172% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 9, 2025

Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway and Chevron. The Motley Fool recommends Occidental Petroleum. The Motley Fool has a disclosure policy.

The energy sector can be a great place for investors to collect a lucrative passive income stream. Many energy companies generate lots of excess cash flow, giving them the money to pay hefty dividends. Several companies in the sector also have long dividend growth streaks.

TotalEnergies (NYSE: TTE), Chevron (NYSE: CVX), and Brookfield Renewable (NYSE: BEPC)(NYSE: BEP) stand out to a few Fool.com contributors as excellent energy stocks to buy for passive income. They pay high-yielding and steadily rising dividends. Here's a look at why they could deliver years of passive income.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

TotalEnergies is acting now so it can thrive through the transition

Reuben Gregg Brewer (TotalEnergies): For most investors, the best way to invest in the energy sector will be to buy an integrated energy company. That's because these businesses have exposure to the entire industry, from the upstream (drilling) through the midstream (pipelines) and into the downstream (chemical and refining). This diversification helps to soften the peaks and valleys of an industry that is known for being volatile. But all of the major integrated energy companies are a little different, with TotalEnergies standing out in a very important way.

In 2020, European peers BP and Shell cut their dividends as they announced plans to increase investment in clean energy assets. TotalEnergies made the same commitment but maintained its dividend. Since that point, both BP and Shell have walked back their clean energy plans. TotalEnergies has increased the pace of its investment in electricity and even created a new division so investors could more easily monitor its progress. The new integrated power division grew operating income 17% in 2024.

Simply put, TotalEnergies is a well run oil and gas company and, increasingly, a well-run clean energy company, too. If you want years of passive income, the French energy giant is positioning itself to not just weather the clean energy transition but also to thrive as the world increases its use of non-carbon fuels. And you can collect a dividend yield of 6%, higher than all but one of its closest peers, if you buy it today. (Note that U.S. investors have to pay French taxes on the dividends they receive, a portion of which can be claimed back when filing U.S. taxes.)

Stress-tested to thrive on lower oil prices

Matt DiLallo (Chevron): Chevron's dividend yield is approaching 5%. That's due to a nearly 20% decline in the oil company's stock price from its recent peak. Shares of the oil giant have sold off because of lower crude prices this year. The price of Brent crude, the global oil benchmark, has fallen more than 10% to around $65 a barrel because of fears that tariffs could slow economic growth and reduce oil demand.

While lower oil prices will have an impact on Chevron's cash flow, they won't affect its ability to continue increasing its high-yielding dividend. The oil giant has stress-tested its business for a downside scenario where Brent averages just $50 a barrel from 2025 through 2027. Under that scenario, Chevron would produce enough cash to cover its investment program and pay a growing dividend with room to spare. Meanwhile, it would have the capacity to buy back shares at the low end of its $10 billion to $20 billion annual target range thanks to its strong balance sheet.

Chevron is on pace to add $9 billion to $10 billion to its annual free cash flow by 2026 in an environment where Brent is in the $60- to $70-a-barrel range. That would enable the company to buy back shares toward the upper end of its target range at the current price point. On top of that, there's additional upside if the company closes its needle-moving acquisition of Hess, which would more than double its free cash flow by 2027 at $70 oil.

Chevron's low-cost production, visible upside catalysts, and strong balance sheet put it in an excellent position to continue increasing its dividend, which it has done for 38 straight years. The oil company has grown its payout faster than the S&P 500 and its closest peer over the past five years. These factors suggest that an investment in Chevron will create a lot of passive income over the years to come.

Riding the renewable energy boom to reward investors

Neha Chamaria (Brookfield Renewable): Brookfield Renewable is one of the largest publicly traded renewable energy companies in the world with a massive portfolio spanning hydropower, wind, solar, and distributed energy and storage. The company also has a large global footprint and is embarking on a big growth journey that should drive its cash flows and dividends higher in the coming years.

To put some numbers to that, Brookfield Renewable is planning to invest $8 billion to $9 billion over the next five years and expects to grow its funds from operations (FFO) per unit by over 10% annually in the long term. That's not an overly ambitious goal if you think it is, simply because almost 6% growth could already be embedded in the company's development pipeline and inflation escalation clauses in its long-term contracts. For those in the know, Brookfield Renewable sells electricity under long-term contracts, and almost 90% of its cash flows are contracted for an average of 14 years.

That also makes Brookfield Renewable's cash flows highly stable and predictable, which is why management has been able to set a goal of increasing its dividend annually by 5% to 9% in the long term. Even a 5% annual dividend growth could create years of passive income for investors if they reinvest the dividends. Investors who own the corporate shares of Brookfield Renewable also get to enjoy a high 5%-plus dividend yield now.

Should you invest $1,000 in Chevron right now?

Before you buy stock in Chevron, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Chevron wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $594,046!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $680,390!*

Now, it’s worth noting Stock Advisor’s total average return is 872% — a market-crushing outperformance compared to 160% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of April 28, 2025

Matt DiLallo has positions in Brookfield Renewable, Brookfield Renewable Partners, and Chevron. Neha Chamaria has no position in any of the stocks mentioned. Reuben Gregg Brewer has positions in Brookfield Renewable Partners and TotalEnergies. The Motley Fool has positions in and recommends Chevron. The Motley Fool recommends BP, Brookfield Renewable, and Brookfield Renewable Partners. The Motley Fool has a disclosure policy.