You can make money from investing in stocks in two primary ways. Your shares can appreciate, or you may also receive dividends. Not every stock pays dividends, though. And not every stock appreciates in value.
However, some stocks are in a good position to do both -- and make you plenty of money in the process. Here are three dividend stocks that could make you richer in July (and beyond).
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Enterprise Products Partners
If you like juicy dividends, you'll probably love Enterprise Products Partners (NYSE:EPD). The midstream energy company's dividend currently yields north of 7.4%. Enterprise has increased its distribution for more than 22 consecutive years, with a compounded annual growth rate of 7%.
Over the last 12 months, Enterprise Products Partners' share price has soared over 40% -- beating the S&P 500's performance during the same period. But can the stock continue its winning ways? I think so.
The company is well-positioned to profit as the global economy recovers from the COVID-19 pandemic. Generally speaking, the stronger the economy is, the higher the demand for the kinds of fuels and petrochemicals that are transported and processed by Enterprise.
Sure, there's a push to transition from fossil fuels to renewable energy sources. However, it's likely that the low-carbon emission natural gas, natural gas liquids, and lower-sulfur crude oil that Enterprise Products Partners focuses on will continue to be important for decades.
Enterprise is also evaluating opportunities in climate-friendly areas such as carbon capture, hydrogen processing, and renewable fuels. With its growth prospects in its core businesses, as well as these new opportunities plus that fantastic dividend, I suspect that this energy stock could outperform the market for years to come.
Innovative Industrial Properties
Cannabis and dividends might seem to go together like ketchup and ice cream. In other words, not at all. However, Innovative Industrial Properties (NYSE:IIPR) blends cannabis and dividends quite well.
IIP is a real estate investment trust (REIT) that focuses on the medical cannabis industry. As a REIT, the company must return at least 90% of its taxable income to shareholders in the form of dividends. IIP has done just that, with its dividend quadrupling over the last three years. Its yield currently stands at nearly 2.8%.
That dividend yield is attractive but not overly impressive. And there's a good reason why it's not higher: IIP's share price has skyrocketed more than 500% over the last three years. As fast as the company's dividends have grown, they still haven't been able to keep up with IIP's share appreciation.
I'm confident that IIP will keep on delivering tremendous gains in the future. The medical cannabis market in the U.S. continues to expand.
Despite its phenomenal growth, IIP still only owns 72 properties in 18 states. There are lots of opportunities for the company to buy and lease additional properties, driving its share price and dividend even higher.
Pfizer
Pfizer (NYSE:PFE) has been a longtime favorite for income investors. The big drugmaker's dividend yield of more than 3.9% is a big draw. With its next dividend payable in September, Pfizer's streak of consecutive quarterly dividend payments will extend to 331.
However, Pfizer hasn't delivered strong gains in recent years. The stock has lagged well behind the S&P 500. I think, though, that Pfizer could pick up momentum going forward.
The COVID-19 vaccine developed by Pfizer and its partner BioNTech is already a huge commercial success. My prediction is that the rise of new coronavirus strains, including the highly contagious delta variant, will boost Pfizer's vaccine sales even more.
Pfizer is also no longer encumbered by its older drugs that have lost exclusivity. The merger of the company's Upjohn unit with Mylan late last year shifted these drugs out of Pfizer's lineup.
I also look for Pfizer to use its growing cash stockpile to make more acquisitions in the not-too-distant future. While Pfizer still probably won't generate jaw-dropping levels of growth, the combination of its great dividend and improving prospects should enable this stock to make investors richer both over the short term and the long term.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.
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