Key Points
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Clearway Energy anticipates growing its cash flow per share by 7% to 8% annually through 2030.
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Kinder Morgan has lined up $9.3 billion of expansion projects that it expects to complete by 2030.
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ConocoPhillips expects to increase its annual free cash flow by $7 billion by 2029.
No one knows what the future holds. However, some companies have more visibility into their future growth potential than others. That makes them ideal long-term holdings.
Clearway Energy (NYSE: CWEN.A)(NYSE: CWEN), Kinder Morgan (NYSE: KMI), and ConocoPhillips (NYSE: COP) stand out for their visible growth over the next several years. They should have plenty of fuel to continue increasing their dividends, making them ideal dividend stocks to hold for the next five years.
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A powerful growth plan
Clearway Energy owns a large portfolio of clean power assets (wind, solar, and natural gas). The company sells the power it produces under long-term contracts with utilities and large corporations. That provides it with lots of steady cash flow.
The clean power company aims to pay out about 70% of its stable cash flow in dividends. It retains the rest to invest in expanding its portfolio. Clearway has already secured investments that should start contributing to its cash flow through 2027. This supports the company’s view that it can increase its free cash flow per share from $2.11 this year to around $2.70 by 2027. Meanwhile, Clearway believes it will have the financial capacity and growth opportunities to increase its cash flow to around $3 per share by 2030. That implies a 7% to 8% compound annual growth rate over the next five years.
Clearway’s growing cash flow will enable it to continue increasing its 5%-yielding dividend. It currently aims to hike its annualized dividend rate to $1.98 per share by 2027, up from its current level of $1.51 per share.
Lots of fuel to grow the dividend
Kinder Morgan is one of the country’s largest natural gas pipeline companies. Its assets generate stable cash flow backed by fee-based contracts, government-regulated rate structures, and hedging agreements.
The energy midstream giant pays out around half of its steady cash flow in dividends, retaining the rest to invest in expansion projects. Kinder Morgan currently has $9.3 billion of expansion projects in its backlog, which should come online through the second quarter of 2030. That’s more than three times the size of its backlog at the end of 2023. The company has been capitalizing on a surge in demand for gas infrastructure to support liquefied natural gas (LNG) export terminals, AI data centers, and other catalysts. It’s currently pursuing over $10 billion of additional expansion projects.
Kinder Morgan’s cash flow should rise as it completes expansion projects, giving it more fuel to increase its 4.3%-yielding dividend. The gas pipeline giant has raised its payout for eight straight years, a streak that isn’t likely to end anytime soon.
The coming free cash flow gusher
ConocoPhillips has built one of the deepest, most durable, and diversified portfolios in the oil and gas industry. It has a treasure trove of low-cost oil supplies. That enables it to produce lots of cash at lower oil prices.
The oil and gas giant is about to enter a period of sustained free cash flow growth. It expects to deliver an incremental $1 billion improvement in its annual free cash flow each year from 2026 through 2028, before hitting an inflection point in 2029. It anticipates capturing an additional $1 billion of cost savings and other synergies from last year’s Marathon Oil acquisition by the end of 2026. Meanwhile, it has investments in three LNG projects that will come online and contribute to its free cash flow in 2027 and 2028. Finally, the company expects to complete its Willow oil project in Alaska in 2029, which it anticipates will add another $4 billion to its annual free cash flow that year. Add it up, and that’s $7 billion in incremental free cash flow over the next few years. That’s a significant boost for a company that produced $6.1 billion in free cash flow through the first nine months of this year.
ConocoPhillips’ surging free cash flow will give it more fuel to grow its 3.6%-yielding dividend. The oil giant recently boosted its payout by 8% and aims to deliver dividend growth within the top 25% of companies in the S&P 500 in the coming years.
Ideal long-term holdings
Clearway Energy, Kinder Morgan, and ConocoPhillips have lots of visibility into their growth prospects over the next several years. As a result, they should have ample power to continue increasing their high-yielding dividends. That should give investors confidence that they can hold these dividend stocks for at least the next five years.
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Matt DiLallo has positions in Clearway Energy, ConocoPhillips, and Kinder Morgan. The Motley Fool has positions in and recommends Kinder Morgan. The Motley Fool has a disclosure policy.