Got $200? Two Dividend Growth Stocks to Buy and Hold Forever

Want to add dividend stocks to your portfolio that won't break the bank? There are plenty of options to consider, even with a $200 investment. But if you want to buy and hold for the long haul, or even forever, you'll need to pick and choose.

If this sounds like you, then the two stocks you need to spend some time with areNextEra Energy (New York Stock Exchange: NEE)respond in singingEnterprise Products Partners (NYSE: EPD). The reasons are as follows.

1. NextEra Energy is not favored for the time being.

NextEra Energy's dividend yield is approximately 3.2%, which is slightly lower than the dividend yield onVanguard Utilities Index ETFNextEra Energy's yield is close to its highest in the past decade, suggesting it's selling like hotcakes today. But don't let that stop you from dismissing the stock; NextEra Energy's yield is right near its highest level in the past decade, suggesting it's selling like hotcakes today.

The next most important number is the dividend growth rate, which has averaged a whopping 10% per year over the last ten years, and management expects the dividend to grow at this rate through 2026. If you're looking for a balance between dividend yield and dividend growth, NextEra Energy is an ideal choice for your portfolio.

At the same time, the company's operations are two-carbon-based. Its core business is NextEra Energy's regulated utility business, which primarily consists of Florida Power & Light. This is a slow but steady business that has long benefited from a growing customer base, thanks to immigrants from the Sunshine State. The other part of the company is a fast-growing renewable power business, driven by the long-term purchase of carpet. Although it is the smaller of the two businesses, NextEra Energy hopes to double its clean energy capacity by 2026.

2. Enterprise Products Partners provides high yield and distribution growth.

Master Limited Partnership (MLP) Enterprise Products Partners has a distribution yield of 7%. distributions have increased annually for 25 consecutive years. The core business of Enterprise Products Partners is energy infrastructure, such as oil pipelines, which allows the company to collect royalties. In other words, the demand for oil and gas is more important than the price of the commodities that flow through Enterprise's vast network of North American energy infrastructure. It is a reliable business in an inherently unreliable industry.

Even so, distribution growth is not as fast as you might expect for a company like NextEra. Over the past 25 years, Enterprise's distribution has grown at an annualized rate of 7%, but recent growth rates have typically been in the low to mid-single digits. This may also be what investors expect in the future. Higher yields will probably make up the bulk of your report. However, if you are a dividend investor who is trying to maximize the return generated by the name of the portfolio, that may not be a problem.

Even more important is the strength of the dividend. In this regard, Enterprise performs very well. It has an investment-grade balance sheet, distributable cash flow to cover 1.7 times the dividend in 2023, and is not highly leveraged relative to its peers of the same size.

One for Growth, One for Profit

While NextEra Energy and Enterprise Products Partners are both well-run companies that you can feel good about holding for years to come, there are significant differences between the two. While both companies regularly increase their income, NextEra Energy is more of a dividend growth investment, while Enterprise Products Partners is more of a high-yield investment. At least one will appeal to you, if not both.

Should you invest $1,000 in Enterprise Products Partners now?

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Reuben Gregg Brewer does not own any of the stocks mentioned above.The Motley Fool holds a recommendation for NextEra Energy.The Motley Fool recommends Enterprise Products Partners.The Motley Fool has a disclosure policy.

Got $200? 2 Dividend-Growth Stocks to Buy and Hold Forever was originally published by The Motley Fool.