Want to become financially independent? Consider buying these wealth-creating dividend stocks.

Many people dream of becoming financially independent (it’s one of my top financial goals). There are many ways to make that dream a reality, and I’ve found that investing in high-quality dividend stocks is a proven wealth-building strategy.

The average dividend stock has generated an annualized total return of 9.2% over the past 50 years. So, if you invest $300 a month By investing in dividend stocks, you could build a million-dollar portfolio in about 30 years. You can grow your wealth even faster by investing more money or by finding stocks that can offer higher returns.

Companies that increase their dividends have historically produced even higher returns (10.2% annualized over the past 50 years). Real estate income (NYSE: O), Brookfield Infrastructures (NYSE: BIPC)(NYSE: BIP)And Enbridge (NYSE: ENB) stand out among the best wealth-creating stocks in terms of dividend growth. Investing regularly in this trio could help you become financially independent.

Creating Wealth Through Real Estate

Realty Income is a real estate investment trust (FPI) who own a big and a growing portfolio of income-generating commercial properties, such as grocery stores, warehouses and casinos. It leases these properties to companies that need physical space to operate their businesses. Long-term leases provide it with stable and growing rental income.

The REIT pays out three-quarters of its ever-increasing cash flow to investors through a monthly dividendHe keeps the rest to help him buy more income-generating properties.

Realty Income believes it can acquire sufficient properties to increase its adjusted operating funds (FFO) of around 4-5% per year. This growing income stream should allow it to continue to increase its dividend, which it has done in each of the the last 107 consecutive quarters.

With a dividend yield recently above 6% and earnings growing at 4-5% per year, the REIT could generate an annualized return Total returns between 10% and 11% in the long term.

High total return potential

Brookfield Infrastructure owns a portfolio of high-quality infrastructure assets, including utilities, ports, pipelines and data centers. The company generates predictable and growing revenues from these businesses, which are supported through long-term contracts and government-regulated tariff structures.

The global infrastructure leader aims to pay out 60% to 70% of its stable cash flow in dividends, while retaining the rest to help fund its expansion.

Brookfield believes it can grow its FFO by 6% to 9% per year organically over the long term. Growth drivers include inflation-related rate increases, volume growth from the expanding global economy and expansion projects.

The story continues

The company also has an excellent track record of profitable acquisitions. He believes in the future offers could give him fuel to generate double-digit FFO per share growth.

This should allow Brookfield to continue to increase its dividend. The company aims to increase its dividend (which yields nearly 5%) by 5% to 9% per year. The company has increased it for 15 consecutive years, every year since its IPO.

With double-digit earnings growth and a dividend yield approaching 5%, the company could produce a total annualized return of around 15%.

Plenty of fuel to increase value for investors

Enbridge has a broad business in the energy infrastructure sector. The Canadian company operates oil and gas pipelines, natural gas utilities and renewable energy projects. These assets generate very a stable cash flow supported by long-term contracts and government-regulated tariffs.

Like Brookfield, Enbridge aims to return 60% to 70% of its stable cash flow to investors through dividends and retains the remaining excess cash for expansion.

The company has billions of dollars of commercially secured expansion projects under construction that are expected to come into service by 2028. This provides strong visibility into the future, and the company expects cash flow per share to grow approximately 3% per year through 2026, and approximately 5% per year thereafter.

This growing cash flow should give it enough resources to continue increasing its dividend, which it has done. every year Enbridge has been in business for nearly three decades. Its current yield is over 7%. With growth of 3% in the near term and 5% in the medium term, Enbridge is expected to generate a total annual return of between 10% and 12% in the coming years.

Dividend stocks that create a lot of wealth

Realty Income, Brookfield Infrastructure and Enbridge have excellent track records of generating income for their long-term shareholders. They consistently increase their dividends, which has historically helped create wealth-generating total returns. As More of the Same Looms on the Horizon, These Dividend Stocks Could Help You get on the way to a financially independent future.

Should You Invest $1,000 in Realty Income Right Now?

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Matt DiLallo holds positions in Brookfield Infrastructure Corporation, Brookfield Infrastructure Partners, Enbridge, and Realty Income. The Motley Fool holds positions in and recommends Enbridge and Realty Income. The Motley Fool recommends Brookfield Infrastructure Partners. The Motley Fool has a disclosure policy.

Want to Become Financially Independent? Consider Buying These Wealth-Creating Dividend Stocks. was originally published by The Motley Fool