Some companies have a knack for making their investors rich. They operate highly profitable businesses, giving them plenty of money to finance their growth while also returning money to investors.
Brookfield Renewable (NYSE: BEPC)(NYSE: BEP) It is Prologue (NYSE:PLD) are proven wealth creators. They are in an excellent position to continue enriching their investors in the future. This does offer great stocks to buy for those looking to grow their wealth over the next three to five years.
A powerful wealth creator
Brookfield Renewable generated an annual average of 15.8% Total return in the last 20 years. This significantly exceeded the S&P 500The average annual total return of 10.3%. Put another way, the renewable energy producer has increased a $10,000 investment made 20 years ago to more than $187,000. This represents US$100,000 more than a similar investment in a S&P 500 index fund.
Brookfield’s ability to grow its profits and dividends at healthy rates has driven these strong returns. The company increased its funds from operations (FFO) at a compound annual rate of 12% since 2016. Meanwhile, it has increased its dividend at a compound annual rate of 6% since 2001.
The company is in an excellent position to continue increasing shareholder value in the coming years. Brookfield Renewable expects a trio of organic growth drivers (inflation-indexed rate increases, margin improvement activities and development projects) to drive 7% to 12% annual growth in its FFO per share through 2028. Recently, improved your already strong in the long term organic growth rate by signing a long-term power deal with tech titan Microsoft. Furthermore, it expects M&A activity to increase its annual FFO per share growth rate, driving it into double digits.
Brookfield Renewable’s rising profits should give it the power to continue increasing its high-yielding dividend (recently around 4.5%). The company aims to increase its payout by 5% to 9% per year over the long term.
This growing dividend will provide investors a good income stream and basic return. Add that to its double-digit earnings growth rate, and Brookfield Renewable could produce total returns in the mid-teens over the next five years.
Lots of growth still ahead
Prologis has also done a great job enriching its investors over the years. O industrial REIT it has delivered an average annual total return of 13.6% over the past decade. This surpassed the S&P 500’s 13% average annual total return during that period.
The REIT has grown rapidly, especially over the past five years. Prologis has grown its core FFO per share at a 12% annual rate over the past five years, significantly faster than the S&P 500’s 7% earnings growth rate. It has benefited from strong rent growth, project development of value creation and significant acquisitions. Meanwhile, the REIT grew its dividend at a compound annual rate of 13% during that period, more than double the 5% dividend growth rate of S&P 500 companies.
Top industrial REIT expects to continue growing on a strong rhythm over the next few years. Prologis sees organic growth drivers such as rising rents, development projects, expanding third-party investment management and energy facilities driving 9% to 11% annual growth in its core FFO per share through 2026. This does not includes the effect of acquisitions, which have historically increased its growth rate per share.
This strong growth outlook puts Prologis in a solid position to continue growing its dividend at a nearly double-digit annual pace. With its payout currently yielding 3.5% (more than double the S&P 500’s 1.4% yield), Prologis can provide a solid and rapidly growing income stream and base return. Add in your earnings growth and you could be generating total annual returns in the low to mid age range for years to come.
Proven wealth creators
Brookfield Renewable and Prologis have a long track record of making their investors rich. They have increased their profits and dividends at above-average rates, which is expected to continue in the future. Because of this, they are in strong positions to let your investors still more rich over the next three to five years. This makes them great stocks to buy right now to build yours wealth in the coming years.
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Matt DiLallo has positions at Brookfield Renewable, Brookfield Renewable Partners and Prologis. The Motley Fool holds positions and recommends Brookfield Renewable, Microsoft and Prologis. The Motley Fool recommends Brookfield Renewable Partners and recommends the following options: long January 2026 $395 calls on Microsoft, long January 2026 $90 calls on Prologis, and short January 2026 $405 calls on Microsoft. The motley fool has a disclosure policy.
2 Stocks That Could Help You Get Richer in the Next 3 to 5 Years was originally published by The Motley Fool
