3 Dividend Stocks Poised To Profit From 3 Massive Macro Trends

Summary

• Dividend investing in sectors with major macro tailwinds can be an excellent way to combine strong current income with exciting long-term growth prospects.
• We share three dividend stocks that are poised to profit from 3 massive macro trends.
• I also discuss which of these stocks I am currently buying and which is on my watch list.

For investors who want to profit from an attractive combination of current income and attractive long-term growth, it is hard to beat dividend-growth stocks (SCHD) operating in booming industries. In this article, we will share three dividend stocks that we believe are poised to soar in the coming years thanks to being leading players in industries that are set to benefit from 3 massive macro trends.

#1. Brookfield Infrastructure Stock (BIP)(BIPC)

BIP is effectively a publicly traded global infrastructure fund run by Brookfield (BN)(BAM), the world's second-largest alternative asset manager and the world's largest infrastructure investor. It has a stellar track record of generating long-term value through both its stellar total return outperformance as well as its strong distribution growth track record:

Moreover, its forward prospects look just as stellar as it offers a compelling combination of a near 6% next twelve-month distribution yield and an expected 8-10% cash flow per unit CAGR for the foreseeable future backed by a well-diversified portfolio of high-quality, mission-critical infrastructure businesses that are almost all contracted or regulated with lengthy durations and inflation protection. Moreover, it has a BBB+ credit rating and access to world-class deal flow through its affiliation with Brookfield.

We are confident in BIP being able to achieve or even exceed this strong growth rate because it stands to benefit from several major tailwinds for the infrastructure sector. These include: growing demand for stable investments to fund the retirement and pension needs of aging populations in major economies, the need to upgrade existing and build out new infrastructure in the developed and developing economies of the world, the need to build up data center and data transmission infrastructure to accommodate the rapidly growing needs to fuel the fourth industrial revolution, the growing demand for manufacturing and supply chain infrastructure in the West as it decouples from China, and the efforts to reduce carbon emissions from the global energy supply chain.

These developments are forecasted to drive tens of trillions of dollars in new investment into the infrastructure space in the coming decades, which should be a huge tailwind to global leaders in the industry such as BIP.

#2. Broadcom Stock (AVGO)

AVGO stock has been a phenomenal place to invest over the years, delivering truly market-crushing performance along with strong dividend growth:

However, it appears to be a likely candidate to continue profiting from the ongoing AI boom. In particular, it is well-positioned in the artificial intelligence infrastructure space as it has been rolling out a range of technologies that are tailored to servicing large-scale AI infrastructure, particularly in the areas of scalability and connectivity. AVGO is a leader in custom AI accelerators and networking solutions and expects these products to drive strong growth for the company moving forward.

Analysts at Barclays and Jefferies have accordingly highlighted the company's strength in being able to benefit from the "second wave" of AI and think it could surge still higher to over $1,400 per share over the next year and put it on a top 10 buy list.

While the stock is far from cheap, it is a truly wonderful company and offers the rare combination of a decent dividend yield, strong dividend growth potential, and significant exposure to the AI revolution.

#3. Barrick Gold Stock (GOLD)

Finally, GOLD is poised to benefit from two major macro trends. First of all, its gold mining business is poised to benefit from several major tailwinds for gold prices (GLD). These include:

• The apparent peaking of the Fed's recent rate-hiking cycle and likely onset of rate cuts later this year. This historically has boded very well for gold prices.
• Central banks are buying gold very aggressively and appear poised to continue doing so for the foreseeable future.
• Gold is a great place to be during periods of geopolitical uncertainty and turmoil. Given the simmering tensions in Eastern Europe, the Middle East, and the Far East, the risk-reward for gold looks more attractive than ever.
• Runaway deficit spending in the U.S. is weighing on the value of the U.S. Dollar, which also bodes very well for gold.

The second major macro trend that GOLD is poised to benefit from is the bullish outlook for copper. Given that the company plans to double its copper business by 2030, it is set to benefit from the projected major jump in copper prices in the coming years as there is a severe supply shortage anticipated as global demand for copper is projected to soar in the coming years due to the electrification trend.

With one of the world's top gold and copper mining portfolios, a strong balance sheet, and a very cheap valuation, GOLD looks like a great place to invest right now to profit from these two mega macro trends.

Investor Takeaway

For dividend investors looking to ride the wave of major macroeconomic trends over the next decade and beyond including electrification, infrastructure, and AI, while also hedging somewhat against geopolitical turmoil and the potential decline of the U.S. Dollar, BIP, AVGO, and GOLD look very compelling right now as part of a well-diversified portfolio. Personally, I am buying GOLD and BIP hand-over-fist right now, and am looking at buying AVGO on a further dip lower.