Key Points

Brookfield Renewable and Realty Income both currently pay high-yielding dividends.
They have an excellent track record of growing their dividends, which should continue.
10 stocks we like better than Brookfield Renewable

Achieving financial independence stands as my primary objective. Financial freedom arrives once passive income covers essential living costs. This drives me toward stocks offering sustainable dividends poised for ongoing growth.

Two of my leading passive income holdings include Brookfield Renewable (NYSE: BEPC)(NYSE: BEP) and Realty Income (NYSE: O). I intend to retain both over the coming decade. Here is the rationale.

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High-powered dividend growth ahead

Brookfield Renewable meets every criterion I require in a core passive income stock investment:

A high current yield: At over 4.5%, it exceeds the S&P 500's roughly 1% yield.
A strong dividend growth track record: Brookfield Renewable has increased its payout by at least 5% annually since 2011.
A fortress financial profile: Brookfield has stable cash flows (90% contracted for an average of 12 years), a comfortable dividend payout ratio (around 75% of its funds from operations (FFO) over the last 12 months), and a strong investment-grade balance sheet (BBB+).
Visible growth profile: It expects to grow its FFO per share by more than 10% annually through at least 2031, which should support dividend growth of 5% to 9% annually.

Although Brookfield's current yield proves very attractive, the company's growth potential explains why I plan to retain it for the next decade. It features multiple growth drivers, including inflation-linked contractual rate increases, margin expansion as existing contracts expire and renew at higher rates, development projects, and acquisitions.

Brookfield maintains a large pipeline of renewable energy development projects, which should keep it occupied for the next decade. For example, it is building over 10.5 gigawatts (GW) of power generation capacity for Microsoft alone between 2026 and 2030. For perspective, Brookfield's current operating capacity stands around 47 GW.

The company's high-powered growth engine should enable strong total returns. With a 4.5%+ yield and a more than 10% annual earnings growth rate, Brookfield could deliver total annual returns in the mid-teens. Thus, it can expand my passive income and wealth over the coming decade.

A dependable passive income producer

Realty Income serves as an ideal passive income investment because it pays a monthly dividend. The real estate investment trust (REIT) also possesses everything I seek in a core passive income investment:

Yield: Nearly 5%.
Dividend growth: Every year since its IPO in 1994. It has raised its payment 135 times, including for the past 115 consecutive quarters, growing it at a 4.1% compound annual rate.
Financial profile: 100% of its cash flow secured by long-term, triple-net leases, a 75% adjusted FFO payout ratio, and an A3/A- credit rating.
Growth potential: A $14 trillion total addressable market opportunity to invest in net-lease real estate across the U.S. and Europe.

Realty Income has implemented several measures over the past year to strengthen its capacity to continue expanding its portfolio and dividend in the coming decade. The REIT is accessing the vast private market by forming several private capital investment vehicles and strategic partnerships. Over the past year, it launched its U.S. Core Plus Fund and joint ventures with Apollo, GIC, and Cloud Capital. This approach will boost returns, supply low-cost equity capital to fund new investments, and generate fresh growth opportunities. For example, one element of its strategic partnership with GIC involves a construction financing and take-out purchase agreement for a $200 million build-to-suit industrial portfolio in Mexico, its first investment in that country. Meanwhile, its programmatic joint venture with Cloud Capital will allow the REIT to invest in high-quality data centers in the U.S. and Europe.

Anchor income stocks

Brookfield Renewable and Realty Income represent two of my foundational income holdings. They pay high-yielding dividends supported by strong financial profiles, delivering income I can rely upon. At the same time, they possess strong growth track records, which should persist in the coming decade. That is why I plan to hold both for the next 10 years and will likely continue adding to my positions to further expand my passive income.

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Matt DiLallo has positions in Brookfield Renewable, Brookfield Renewable Partners, and Realty Income. The Motley Fool has positions in and recommends Microsoft and Realty Income. The Motley Fool recommends Brookfield Renewable and Brookfield Renewable Partners. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.