All articles tagged with #dividend investing
Building a dividend portfolio from scratch involves focusing on quality, sustainable dividend growers rather than high-yield, high-risk options. Starting with ETFs can provide balanced exposure, and adding well-researched individual stocks can enhance growth, income, and reduce risk. The strategy emphasizes long-term stability and diversification, making it suitable for investors seeking consistent returns.
The utility sector is currently undervalued, making it an opportune time for long-term dividend investors to consider stocks like NextEra Energy, Black Hills, and Northwest Natural, all of which offer historically high yields. NextEra Energy boasts a 10% annualized dividend growth rate and a unique business model, while Black Hills, a Dividend King, offers a 4.7% dividend yield and strong regional presence. Northwest Natural, another Dividend King, presents a 5.3% dividend yield and a 67-year streak of annual dividend increases, despite predicting a temporary earnings dip in 2024. Each utility caters to different types of income investors, providing potential value for portfolios in April.
Dividend investing can provide a lucrative source of passive income and long-term wealth building. Here are 10 ultra-high-yield dividend stocks to consider in 2024: Hercules Capital with a 10.6% dividend yield, Ares Capital with a 9.5% dividend yield, Horizon Technology with an 11.1% dividend yield, Energy Transfer with an 8.4% dividend yield, Enterprise Products Partners with a 7.2% dividend yield, Enbridge with a 7.8% dividend yield, Kinder Morgan with a 6.5% dividend yield, Rithm Capital with a 9.1% dividend yield, Altria with a 9.6% dividend yield, and Verizon Communications with a 6.6% dividend yield. Each stock offers unique opportunities for investors seeking high dividend yields and potential long-term growth.
In the current digital finance era, the focus on short-term trading is prevalent, but some investors prioritize passive income with minimal involvement. Two securities worth holding onto indefinitely are Ares Capital Corporation (ARCC) with a 9.5% yield, benefiting from deep diversification and high-quality management, and RLJ-A Preferred with a 7.8% yield, showing strong performance metrics and potential for perpetual income. Embracing a long-term approach, these investments exemplify the beauty of the Income Method, providing a reliable infusion of cash for steady income.
Dividend lovers can find promising investment opportunities in Realty Income, Brookfield Infrastructure, and Clearway Energy, as these companies offer high yields and visible growth. Realty Income has a history of consistent dividend payments and expects to continue growing its attractive dividend. Brookfield Infrastructure recently announced its 15th consecutive annual dividend increase and plans to increase its payout at a 5% to 9% annual rate over the long term. Clearway Energy expects to grow its already alluring dividend toward the upper end of its 5% to 8% annual target range through 2026, backed by its capital recycling strategy and renewable energy investments.
When considering high-yield dividend stocks in the S&P 500, investors should be cautious. Altria's declining cigarette business raises concerns about the sustainability of its dividend, while Pioneer Natural Resources and Devon Energy have variable dividend policies tied to energy prices, making their income streams unreliable. Additionally, Pioneer's pending acquisition by ExxonMobil adds further risk. Not all high-yield stocks are worth owning, and these three may not be attractive options for investors seeking reliable income from their portfolios.
Despite significant declines in their stock prices, Devon Energy and Pfizer are offering ultra-high dividend yields of around 7% and 6% respectively. Devon's improving outlook and attractive valuation, along with its rebounding free cash flow and projected increase in dividends, make it an appealing investment. Pfizer, despite concerns about declining demand for COVID-19 products and upcoming patent expirations, has a strategy in place to handle these challenges and expects significant revenue growth from new product launches and business development deals. Both stocks are considered to be bargains with potential for long-term growth.
Chevron is a strong buy for most investors due to its reliable dividend yield, consistent dividend growth, and lower debt-to-equity ratio compared to its peers. While the global shift towards cleaner energy options may pose a challenge in the long term, the company is well-positioned to meet strong demand for carbon fuels through at least 2050. Overall, Chevron's business model and financial stability make it a favorable choice in the integrated energy space, especially for dividend investors.
Warren Buffett warns against the dangers of leverage, cautioning that it can lead even the smartest investors to financial ruin. This applies to dividend investing as well, as excessive reliance on debt can undermine the stability and growth of a company's dividend. Prudent balance sheet management is crucial for dividend investors, and examples of companies with attractive yields and strong balance sheets include Enterprise Products Partners, Realty Income, and Brookfield Infrastructure. Smart investors should prioritize slow and steady compounding over the allure of quick gains through leverage, as the long-term rewards of value investing and dividend compounding are substantial and attainable.
The Schwab U.S. Dividend Equity ETF (SCHD) has been a popular choice for dividend investors seeking higher yields. However, the author argues that the strategy may no longer be as effective due to overvaluation and lack of revenue and earnings growth. The author points out that SCHD's top holdings have shown minimal revenue growth, and the ETF's performance has underperformed the market. Additionally, the author suggests that safer alternatives, such as Treasury Floating Rate Bond ETF (TFLO), offer higher yields and lower risk. As a result, the author rates SCHD as a "Sell" and advises investors to consider other options.
High Dividend Opportunities recommends two dividend-paying investments with attractive yields. The first pick is the Liberty All-Star Equity Fund (USA), a highly diversified Closed-End Fund (CEF) that offers a 9.3% yield. The fund comprises several desired stocks and has a distribution policy designed to pay out 10% of its NAV. The second pick is the abrdn Global Premier Properties Fund (AWP), a CEF that invests in global REITs and offers a 12.2% yield. With rising interest rates and a weakening U.S. Dollar, AWP is expected to benefit from a better operating environment for REITs. Both picks provide opportunities for investors to buy the dip and collect dividends.