3 Top Dividend Stocks to Buy in May

Despite the volatility in the broader stock market, the S&P 500 index (SNPINDEX: ^GSPC) is still offering investors a tiny dividend yield of just 1.3%. You can do much better than that with companies like NextEra Energy (NYSE: NEE), Chevron (NYSE: CVX), and Enbridge (NYSE: ENB), which offer yields as high as 5.8%. Here's a quick look at each of these top dividend stocks as May gets underway.

1. NextEra Energy is a dividend growth machine

NextEra Energy's dividend yield is around 3.3% today, which is more than twice what you'd get from the S&P 500 index. The dividend has been increased annually for three decades. But the real story here is that the annualized rate of dividend growth over the past decade was a huge 10%. Management is projecting that same level of dividend growth to continue for the foreseeable future.

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What's really interesting is that NextEra Energy is a utility, a sector known for slow and steady growth over time. NextEra bucks that trend because it is really two companies in one. The foundation is the company's regulated utility operation in Florida, a state that has benefited from in-migration for many years. The growth engine for NextEra, however, is its large and growing clean energy business. With the shift toward cleaner power likely to play out over decades, there's no reason to expect this dividend growth machine to slow down anytime soon.

Image source: Getty Images.

2. Chevron knows how to manage the ups and downs

Chevron's dividend yield is 5%. The dividend has been increased annually for 38 consecutive years. The growth rate ebbs and flows over time, but has outdistanced the historical rate of inflation growth over the past decade. That means the buying power of the dividend is increasing. What's special about all of this is that Chevron operates in the highly volatile energy sector.

Chevron is what is known as an integrated energy company, which means that it has operations in the exploration (upstream), transportation (midstream), and chemicals and refining (downstream) segments of the industry.

Results in both the upstream and downstream are highly dependent on volatile commodity prices. But, having exposure to all three segments of the industry helps to soften the ups and downs Chevron experiences. And the company has an impressively strong balance sheet, which allows it to add leverage during weak patches so it can continue to support its business and dividend.

If you are looking for an energy stock to own over the long term, Chevron is built from the ground up to be a survivor.

3. Enbridge is built to reward dividend lovers today and tomorrow

Enbridge's dividend yield is 5.8%, the highest dividend yield on this list. The dividend has been increased for 30 consecutive years. Like Chevron, Enbridge operates in the energy sector. However, all it does in the sector is transport energy over its vast North American midstream network. The company charges fees for the use of this network, which means that its cash flows tend to be fairly stable regardless of the price of oil and natural gas.

That said, like NextEra Energy, Enbridge is also looking to provide cleaner energy options to its customers. That includes operating natural gas utilities and building a clean energy business that operates things like solar and wind farms.

Midstream assets make up the vast majority of the business, but the company's core approach is to provide the world with the power it needs and, along the way, provide investors with a reliable and steadily growing dividend. It's a bit of a slow and steady tortoise, but investors looking to maximize the income their portfolios generate probably won't mind that minor drawback.

Plenty of options for dividend investors today

Just because the broader market isn't particularly rewarding on the dividend front today doesn't mean that you can't find attractive high yield stocks to own. NextEra Energy is a great option for dividend growth lovers. Chevron is a way to gain exposure to volatile energy markets while still collecting a reliable and lofty dividend. And Enbridge is a high yielding and reliable midstream company that is positioning itself for change.

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Reuben Gregg Brewer has positions in Enbridge. The Motley Fool has positions in and recommends Chevron, Enbridge, and NextEra Energy. The Motley Fool has a disclosure policy.