3 Top Dividend Stocks Under $100 to Buy in 2025

Source The Motley Fool

It takes money to make money. However, it might not take as much as you think. Many top-notch dividend stocks cost less than $100 per share.

Brookfield Infrastructure (NYSE: BIPC)(NYSE: BIP), Realty Income (NYSE: O), and NextEra Energy (NYSE: NEE) are three of the top options under that price point. Here's what makes them great stocks to buy in 2025 for those with a little bit of cash to invest.

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Ample growth ahead

Brookfield Infrastructure stock currently trades at around $40 per share. At that rate, investors could lock in a dividend yield right above 4%, several times higher than the broader market's average (the S&P 500 yields around 1.2%).

The diversified global infrastructure company (utilities, energy midstream, transportation, and data) has done an excellent job growing its dividend over the years. Last year was its 15th straight year of dividend growth (every year since its formation). It has increased its payout at a 9% compound annual rate during that time.

Brookfield is in a strong position to continue increasing its payout. It generates a very stable cash flow (85% is contracted or regulated) and pays out a conservative percentage of that money in dividends (60% to 70% of its funds from operations [FFO] annually).

It retains the rest to help fund expansion projects. It currently has over $8 billion of projects in its backlog, which helps drive its view that it can grow its FFO per share by more than 10% per year, supporting its expectation that it can deliver 5% to 9% annual dividend growth.

The steady growth should continue

Shares of Realty Income currently cost around $55 apiece. The real estate investment trust (REIT) yields nearly 6% at that level. The company has done a fantastic job increasing its dividend. It has raised its payout every year since 1994, including the last 109 quarters in a row. Overall, it has delivered 4.2% compound annual dividend growth over the past three decades.

Realty Income's high-yielding dividend is on a very solid foundation. It owns a diversified portfolio of properties net leased to many of the world's top companies, providing it with very stable rental income. It pays out about 75% of its steady income in dividends, retaining the rest to invest in additional income-generating properties. Realty Income also has one of the top balance sheets in the REIT sector.

The REIT believes it can grow its adjusted FFO per share by a mid-single-digit annual rate in the future. Growth drivers include rental increases, new property acquisitions, and management income from its recently launched private fund platform. Realty Income has a very long growth runway, given that trillions of dollars in commercial real estate across the U.S. and Europe are suitable for the net lease structure.

A powerful growth tailwind

NextEra Energy's stock price is a bit above $70 these days. At that level, the utility offers a nearly 3% dividend yield. The energy company has also increased its payment annually for the past three decades and grown its dividend at around a 10% compound annual rate over the past 20 years.

The utility currently plans to grow its dividend by around 10% per year through at least 2026. Its lower dividend payout ratio (59% at the end of 2023, below the 65% average of its peers) and earnings growth outlook drive that expectation. NextEra Energy believes it can deliver adjusted earnings-per-share growth at or near the top end of its 6% to 8% annual target range through 2027 while maintaining its strong balance sheet.

Renewable energy is a big factor powering NextEra Energy's growth outlook. Forecasts estimate that U.S. power demand will accelerate over the next 20 years, growing six times faster than the previous two decades. That should drive robust demand for renewables, with estimates suggesting the U.S. could deploy three times the renewable energy capacity over the next seven years as the country did over the last seven years. As a leader in developing renewable energy, NextEra Energy should capture a meaningful portion of this accelerating demand growth.

Top-tier dividend stocks

Brookfield Infrastructure, Realty Income, and NextEra Energy offer higher-yielding dividends backed by rock-solid financial profiles. They also have excellent records of increasing their dividends, which should continue. Add in their low share prices, and they're great dividend stocks to buy this year, especially for those with only a little bit of spare cash they want to invest.

Don’t miss this second chance at a potentially lucrative opportunity

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*Stock Advisor returns as of January 13, 2025

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

Disclaimer: For information purposes only. Past performance is not indicative of future results.
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