3 Top Stocks Yielding Over 3% to Buy Right Now for Dividend Income and Upside Potential
June 7, 2025
Key Points
Dividend-paying stocks can be great investments. They can enable you to generate some passive income, providing a real return. In addition, dividend stocks have historically produced strong total returns as they've grown their earnings and shareholder payouts, driving stock price appreciation.
Brookfield Infrastructure
(NYSE: BIPC)
(NYSE: BIP)
,
PepsiCo
(NASDAQ: PEP)
, and
Prologis
(NYSE: PLD)
currently stand out among dividend stocks. The trio has excellent records of paying growing dividends. On top of that, they currently offer attractive yields of more than 3%, partly due to drops in their stock prices this year. Because of that, they offer compelling blends of dividend income and upside potential.
Down despite its robust growth prospects
Shares of Brookfield Infrastructure have declined by nearly 10% from their 52-week high. That slump has pushed the global infrastructure company's dividend yield up to 4.2%. The company's stock price has also slumped, even though it's having another good year, and its
funds from operations (FFO)
rose 5% in the first quarter, powered by inflation-driven rate increases, recently completed expansion projects, and acquisitions closed in the past year.
Brookfield Infrastructure has a terrific record of paying dividends. It has increased its payment in all 16 years since its formation, growing it at a 9% compound annual rate.
The company expects to continue increasing its payout
in the future
, targeting 5% to 9% annual growth. It sees a trio of organic growth drivers (
inflation-driven
rate increases, volume growth as the global economy expands, and expansion projects), increasing its FFO per share by 6% to 9% per year. On top of that, the company has an excellent record of making accretive acquisitions funded by
recycling capital
. It recently agreed to invest $500 million
in the acquisition of
Colonial Enterprises, which owns a leading U.S. refined products pipeline system.
It also partnered with
GATX Corporation
to buy
Wells Fargo
's rail operating lease portfolio (consisting of 105,000 railcars) for $4.4 billion.
It's
also
acquiring
Wells Fargo's rail finance lease portfolio (23,000 railcars and 440 locomotives) in a separate deal.
Brookfield estimates that
acquisitions like these
will help push its FFO growth rate above 10% annually.
Continuing to satisfy investors with a growing dividend
PepsiCo stock has slumped more than 25% from its 52-week high. That plunge has propelled its dividend yield to 4.4%. That's a tasty level for a company with a long history of satisfying investors' cravings for more dividend income.
The food and beverage giant recently increased its dividend payment by another 5%. That extended its growth streak to 53 straight years, enough to qualify PepsiCo as an elite
Dividend King
.
PepsiCo's stock is down due to concerns that tariffs, a slowing economy, and changing consumer tastes will impact the company's growth. On the one hand, the company is seeing some impact from those headwinds this year.
It now expects its earnings per share to be at the same level as last year's, compared to
the mid-single-digit growth rate it initially expected
.
However, the company has a resilient business and expects its growth to reaccelerate in the coming years. It has been investing heavily in the strategic transformation of its portfolio to healthier food and beverage options, including buying Poppi, Siete, and Sabra in recent quarters. These investments should pay dividends for the company in the coming years by reigniting its earnings growth engine,
which should enable
PepsiCo to continue increasing its dividend.
Executing well despite some headwinds
Prologis stock has slumped more than 15% this year. That sell-off has helped nudge its dividend yield up to 3.7%. The leading
industrial real estate investment trust (REIT)
has been under
some
pressure due to slowing demand for warehouse space.
However, the company is still performing well amid all the uncertainty. Its core FFO per share increased 11% in the first quarter as it continues to sign new leases at much higher rates compared to the price point of expiring contracts
on
the same space.
Meanwhile, the long-term demand picture for warehouse space remains robust.
"Over the long term, limited new supply and high construction costs support continued rent growth,"
commented
CEO and co-founder Hamid Moghadam in the first-quarter earnings press release.
That should enable the company to capture higher rental rates on its existing properties and
continue developing
new warehouses. In addition, Prologis is using some of its land to build data centers to capitalize on the growing demand for these properties to support increased digitalization and AI technology.
Prologis' growth prospects should enable
the
REIT to continue increasing its
dividend
.
It has grown its payout at a 13% compound annual rate
over the past five years
.
That's faster than the
S&P 500
(5%) and REIT sector average (6%).
Strong total return potential
Brookfield Infrastructure, PepsiCo, and Prologis offer investors the best of both worlds. They pay dividends that yield more than double the S&P 500's average (less than 1.5%), and they have compelling upside potential from their earnings growth and an eventual recovery in their stock prices. Because of that, they could produce strong total returns from here, making them great dividend stocks to buy right now.
Should you invest $1,000 in PepsiCo right now?
Before you buy stock in PepsiCo, 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 PepsiCo 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 $669,517
!*
Or when
Nvidia
made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation,
you’d have $868,615
!*
Now, it’s worth noting
Stock Advisor
’s total average return is
792% — a market-crushing outperformance compared to
171%
for the S&P 500. Don’t miss out on the latest top 10 list, available when you join
Stock Advisor
.
Wells Fargo is an advertising partner of Motley Fool Money.
Matt DiLallo
has positions in Brookfield Infrastructure, Brookfield Infrastructure Partners, PepsiCo, and Prologis. The Motley Fool has positions in and recommends Prologis. The Motley Fool recommends Brookfield Infrastructure Partners and recommends the following options: long January 2026 $90 calls on Prologis. The Motley Fool has a
disclosure policy
.
