3 Dividend Stocks Perfect for Gen Z Investors

Key Points

• If you were starting a brand-new utility company from scratch today, it would probably look a lot like NextEra Energy.

• Brookfield Infrastructure Partners offers access to a collection of in-demand companies you’d never otherwise be able to invest in.

• Mobile technology powerhouse Qualcomm hasn’t featured prominently in the AI revolution yet, but that’s about to change.

• 10 stocks we like better than NextEra Energy ›

Were you born between early 1997 and late 2012? In other words, are you one of America's 70 million Gen Z residents, currently between the ages of 13 and 28?

If so, you may not be thinking all that much about saving for retirement just yet. Many of the 20-somethings in your generation are, however, and wisely so -- the sooner you get started, the bigger your eventual nest egg will be. And as the Motley Fool's own in-house research points out, growth stocks are your favorite investment. Smart choice. You've got plenty of time to ride out the volatility most of these names are sure to dish out, en route to oversized gains.

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If you're a Gen Zer steering clear of dividend stocks simply on principle, though, you might want to reconsider. There are actually several dividend-paying names able to offer the overall upside you want. They're just doing it in a different way than growth stocks.

Here's a closer look at three income-generating growth picks that might just be at home in a Gen Z portfolio.

Image source: Getty Images.

1. NextEra Energy

Utilities stocks are some of the oldest, stodgiest, and slowest-growth companies this country has ever birthed. They've seemingly evolved just enough to stick around, with most of them still struggling to phase out their legacy fossil-fuel power production facilities.

If you were going to create a brand-new electric utility outfit from scratch today, however, it would probably look a lot like NextEra Energy (NYSE: NEE). More than half the power it currently generates comes from renewable sources, while none comes from coal or oil. The dirtiest, least-green fuel source it uses is natural gas, which actually burns quite cleanly.

None of this is mere luck or accident, either; it's all by design. Recognizing well over a decade ago that the future of the industry was alternatives to fossil fuels, what was then Florida Power & Light began investing in solar and wind projects. The localized utility service provider continued to add clean production capacity -- enough to begin selling it to other utility companies. It's since grown into a major electricity wholesaler (although it also still directly serves 12 million Floridians) with a massive 72 gigawatts' worth of potential output. (That's enough to power about 50 million homes.)

That's still just the beginning, though. With the advent of artificial intelligence data centers and the ever-growing number of electric vehicles, research outfit McKinsey expects global electricity consumption to more than double between 2023 and 2050.

The problem? The world's not ready to deliver it. But as one of the nation's biggest energy infrastructure investors, with a backlog of nearly 30 gigawatts' worth of output capacity just waiting to be completed, NextEra Energy is readier than any of its rivals to meet the need. And it can do so in a way that satisfies environmental hawks as well as regulators.

You'd be plugging into this stock while its forward-looking dividend yield stands at 3.2%, by the way. And that's based on a dividend that's not only been raised every year over 30 years, but has also grown at an average rate of 11% per year for the past 10 years. That payout growth is better than the average annual net growth of the overall market.

2. Brookfield Infrastructure Partners

Brookfield Infrastructure Partners (NYSE: BIP) (NYSE: BIPC) is a bit of an unusual bird. It's not a conventional company that owns and operates a single business. Rather, it holds stakes in several different private and publicly traded companies operating in North America and abroad, including railroad outfit Genesee & Wyoming, Colombian natural gas distributor Vanti, Canadian midstream company Inter Pipeline, and U.S. data center operator Evoque. As its name suggests, infrastructure is its specialty, but the term can clearly mean a lot of things.

There are two reasons Gen Z investors might want to consider stepping into a stake in Brookfield Infrastructure Partners.

First, although it's willing to invest capital in several different kinds of business, a closer look at Brookfield's holdings actually reveals a rather savvy strategy. That is, it's limiting its investments not just to proven businesses the world can't live without, but to businesses with demand that will continue to grow indefinitely -- industries like utilities, data centers, logistics, and of course, energy. The holding company is also geographically diverse and tends to have exposure to underserved regions where competition is modest.

Second, this relatively young organization is being built from the ground up to pay ever-growing dividends. Not only is its current forward-looking yield of 5.5% above-average, but the company realistically thinks it can grow its payouts between 5% and 9% per year.

This rising income growth, paired with whatever capital appreciation the organization's holdings produce, has the potential to make Brookfield Infrastructure Partners a better long-term performer than the overall market and with less volatility.

3. Qualcomm

Finally, add Qualcomm (NASDAQ: QCOM) to your list of dividend stocks that are perfect for Gen Z investors.

Yes, this technology company pays a dividend, and a surprisingly healthy one at that. The forward-looking dividend yield of Qualcomm's shares currently stands at 2.1%, with roughly one-third of profits being regularly passed along to shareholders. The dividend has nearly doubled in size over the past decade, too, more or less in step with the company's earnings growth.

But Qualcomm isn't a dividend stock that also happens to be a technology growth company -- it's a technology growth company that also happens to pay a nice (and growing) dividend. This growth potential in technology remains the chief reason a young person would want to own it.

And that potential is particularly compelling right now.

Although most investors have heard of the company, there's no denying it's been largely left out of the artificial intelligence (AI) frenzy that's proven so bullish for Nvidia and Arm Holdings. As we enter the next phase of the AI era, though, look for artificial intelligence (and generative AI in particular) to shift away from data centers and toward mobile devices themselves. Global Market Insights expects the worldwide mobile AI industry to grow at an average annual pace of more than 25% all the way through 2034.

This bodes well for Qualcomm, which already has two cost-effective AI processors: its affordable Snapdragon X for personal computers, and its Snapdragon 8 for smartphones. Both are capable of performing the heavy-duty artificial intelligence work that will be expected of a range of consumer devices from PCs to smartphones in future. Qualcomm is well-positioned to capture at least its fair share of any growth on this front, just given its existing collaborations. Microsoft is featuring AI-capable business laptops with Snapdragon CPUs onboard, and Snapdragon processors were chosen to power smartphone giant Samsung Electronics' AI-capable Galaxy S25 handsets and Book4 Edge AI personal computers.

In other words, Qualcomm features prominently in AI's move to mobile devices. That's a growth opportunity that could remain robust for a long, long time.

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James Brumley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Microsoft, NextEra Energy, Nvidia, and Qualcomm. The Motley Fool recommends Brookfield Infrastructure Partners and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.