Williams’ natural gas focus makes it a higher-growth play than its midstream peers.
Brookfield Renewable is one of the biggest and best-diversified green energy plays.
It might seem like a bad time to invest in blue chip dividend stocks. The 10-Year Treasury is trading at a 4.5% yield; the Federal Reserve might raise interest rates in the second half of the year if inflation doesn't cool off; and the S&P 500 looks expensive at 32 times earnings.
All those factors suggest it's smarter to stick with low-risk CDs, T-bills, and investment-grade corporate bonds instead of buying dividend stocks. However, that tepid interest in dividend stocks is creating great buying opportunities for long-term investors who plan to hold their stocks for a few decades rather than a few quarters.
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Let's check in on two of my favorite dividend plays in the energy sector -- The Williams Companies (NYSE: WMB) and Brookfield Renewable (NYSE: BEPC) -- and see why they could still turn a modest $3,000 investment into a lot more money over an entire lifetime.
The Williams Companies operates more than 33,000 miles of pipeline across the United States. As a midstream company, it's well insulated from volatile commodity prices because it charges upstream and downstream companies "tolls" to use its pipelines.
Unlike other midstream companies, which typically transport a mix of natural gas, crude oil, and other resources, Williams primarily handles natural gas through its Transco pipelines that run from Texas to the Eastern Seaboard. That natural gas "superhighway" transports about 30% of the country's natural gas, which powers nearly half of the data centers in the United States.
To capitalize on the rapid expansion of the power-hungry cloud infrastructure and AI markets, Williams builds "behind the meter" (BTM) sites at data centers to provide hyperscalers with a stable flow of natural gas while bypassing traditional utilities.
That's why its year-end backlog jumped from $11.8 billion in 2024 to $15.5 billion in 2025, and it's considered a higher-growth play than more diversified pipeline operators. Analysts expect its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to grow at an 11% CAGR from 2025 to 2028. It has an enterprise value of $124.5 billion, but it still looks like a bargain at 15 times this year's adjusted EBITDA.
Williams pays a forward yield of 2.8% and has raised its payout annually for 10 consecutive years. Therefore, it's a great long-term play for investors who want a mix of predictable income and some exposure to the secular growth of the cloud infrastructure and AI markets.
Brookfield Renewable builds hydroelectric dams, wind farms, solar power plants, and other utility-scale green energy projects. It has an operational capacity of 47.3 GW, spanning 35 power markets across 25 countries, with a pipeline of over 200 GW of renewable projects (including 85 GW of advanced-stage projects) in development.
That growth is driven by its long-term renewable power agreements with tech giants like Microsoft and Alphabet's Google, which are expanding their data centers to handle the latest cloud and AI applications. New decarbonization and green manufacturing initiatives are also major catalysts.
Brookfield Renewable pays a forward dividend yield of 4.2%. It's raised its dividend every year since its 2020 launch as a simpler alternative to Brookfield Renewable Partners (NYSE: BEP), which holds the same assets but operates as a master limited partnership (MLP).
From 2025 to 2028, analysts expect its adjusted EBITDA to grow at a steady 6% CAGR. With an enterprise value of $53.1 billion, it trades at just 14 times this year's adjusted EBITDA. So if you're looking for a simple green energy play that will profit from the AI boom over the next few decades, Brookfield Renewable checks all the right boxes.
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Leo Sun has positions in Brookfield Renewable and Williams Companies. The Motley Fool has positions in and recommends Alphabet and Microsoft. The Motley Fool recommends Brookfield Renewable and Brookfield Renewable Partners. The Motley Fool has a disclosure policy.