Interest rates (and interest rates) are falling, but here are three dividends that should definitely keep rising

After months of speculation, the Federal Reserve has finally started cutting interest rates. Additionally, the Fed has indicated that it will cut interest rates further.

Falling interest rates have far-reaching effects. You may have noticed that your bank has lowered the interest rate on your savings account, or that interest rates on CDs and Treasury bonds are no longer as attractive as they once were.

While interest rates on some investments are falling like fall leaves, many dividend stocks expect their payouts to continue rising. Enbridge (ENB -0.76%), Children Morgan (KMI 1.79%)And NextEra Energy (NOO -0.45%) Some Fool.com contributors stand out for their ability to increase their dividends despite changing market conditions. This makes them ideal for those who want to earn more income in the future.

Enbridge isn't sitting still

Reuben Gregg Brewer (Enbridge): The big draw for most investors in midstream giant Enbridge will likely be the company's sizable 6.6% dividend yield. That's reasonable considering the dividend has been increased annually (in Canadian dollars) for 29 consecutive years. But Enbridge offers so much more than just a dividend.

A key part of the company's approach is to adapt its portfolio to emerging changes in global energy demand. For this reason, the company's portfolio includes oil pipelines, natural gas pipelines, natural gas utilities and renewable energy investments. Natural gas is expected to be a key transition fuel as the world shifts toward cleaner alternatives, and renewable energy is the direction the world is moving. But oil is still important, allowing Enbridge to use its oil-linked profits to increase its natural gas exposure and build things like wind and solar farms.

The most recent transaction, the purchase of three natural gas utilities Dominion Energyis a great example of the goal. Before the deal, Enbridge generated 57% of its earnings before interest, taxes, depreciation and amortization (EBITDA) from oil. After the deal it will only be 50%. As an added bonus, regulated natural gas utilities have extremely reliable, if slow, growth opportunities ahead of them. These deals, which increased natural gas utilities' share of EBITDA from 12% to 22%, help solidify Enbridge's ability to achieve its long-term target of 5% distributable cash flow growth.

Enbridge looks boring, but high earnings supported by slow and steady business becomes very exciting over time. Especially if the company specifically adapts to the changing dynamics of the market it serves.

Fuel will continue to rise

Matt DiLallo (Kids Morgan): Interest rates have been a headwind for Kinder Morgan in recent years. For example, at the end of 2022, the company announced that its distributable cash flow would decrease by $0.15 per share in 2023 the impact of higher interest rates. That's because a quarter of its debt is floating rate, meaning the interest expense on that debt rises and falls with interest rates.

Despite these headwinds, Kinder Morgan has continued to increase its high-yield dividend, which currently stands at over 5%. The seventh consecutive annual dividend increase took place at the beginning of the year.

As interest rates fall, they go from being a headwind to a tailwind for Kinder Morgan. Interest expense on the company's variable-rate debt is expected to fall next year, what will save That's money. Meanwhile, lower interest rates will make it cheaper to refinance maturing debt and to issue new debt to finance acquisitions when opportunities arise.

Prices aren't the company's only tailwind. It takes advantage of the growing demand for natural gas for supply Liquefied natural gas Export facilities and utilities, the latter being positioned for a Increase in power demand of AI data centers. Kinder Morgan already has $5.2 billion worth of expansion projects planned to meet this growing demand. That includes a $1.7 billion pipeline project to bring more gas to utilities in the Southeast, scheduled to begin operations in late 2028.

Kinder Morgan's backlog gives the company good insight into its ability to grow its robust and stable cash flows. This rising cash flow should give the company enough impetus to continue increasing its dividend in the coming years, even if interest rates rise Uprising again.

Lots of power to further increase the payout

Neha Chamaria (NextEra Energy): NextEra Energy owns the largest utility in the United States, Florida Power & Light, and is also the world's largest producer of wind and solar energy. The company relies heavily on debt to finance the growth of its utility and renewable energy businesses. Therefore, falling interest rates should be good news for NextEra Energy shareholders in several ways, including dividends.

NextEra Energy has a strong dividend record. Between 2003 and 2023, the company increased its dividend at a compound annual growth rate (CAGR) of 10%, supported by a CAGR of approximately 9% in adjusted earnings per share (EPS). This dividend growth has provided significant returns to shareholders who reinvested the dividends over the decades, and given NextEra Energy's goals, this should continue to be the case.

NextEra Energy targets adjusted earnings per share growth of 6% to 8% and average dividend per share growth of 10% through 2026, driven by cash flow growth for its growth investments in both companies. For example, the company expects to invest $65 billion to $70 billion in renewable energy alone over the next four years. Lower interest rates should make financing growth more affordable for NextEra Energy, and these investments should increase the company's cash flow and support higher dividends. In short, this dividend stock with a 2.5% dividend yield should continue to increase its dividend payout year after year.