Healthy dividend stocks have the potential to:
- Offer a plump income stream in both good times and bad times.
- Provide much-needed diversification to growth-oriented portfolios.
- Outperform the S&P 500 over the long haul.
Here’s a look at three stocks with oversized dividends. Remember, you don’t have to start big.
Don’t miss
- Mitt Romney says a billionaire tax will trigger demand for these two physical assets — get in now before the super-rich swarm
- Stocks are down, but “cash is not a safe investment,” says Ray Dalio — get creative to find strong returns
- Warren Buffett likes these 2 investment opportunities outside of the stock market
Invest in real estate without the headache of being a landlord
Imagine owning a portfolio of thousands of well-managed single family rentals or a collection of cutting-edge industrial warehouses. You can now gain access to a $1B portfolio of income-producing real estate assets designed to deliver long-term growth from the comforts of your couch.
The best part? You don’t have to be a millionaire and can start investing in minutes.
Learn MoreJPMorgan Chase (JPM)
Let’s start with a bank stock.
With inflation running hot, people are concerned about the continuous interest rate hikes from the Fed. But as it turns out, banks typically do well in a rising interest rate environment.
Banks lend money at higher rates than they borrow, pocketing the difference. When interest rates increase, the spread for how much a bank earns widens.
JPMorgan Chase is the largest U.S. bank, with a whopping $4.0 trillion in assets. The stock had a strong rally in 2021 but later gave up some of the gains. Year to date, it’s down around 29%.
The latest financials didn’t cheer up investors. In Q1, JPMorgan produced $2.63 per share in earnings, down from the $4.50 per share earned in the year-ago period.
Dividend checks, on the other hand, remain plentiful. Last summer, the bank announced an 11% increase to its quarterly dividend rate to $1 per share.
It currently yields 3.5%, which is higher than what’s offered at Goldman Sachs (2.6%), Bank of America (2.6%) and Wells Fargo (2.5%), but below Morgan Stanley (3.6%).
Walgreens Boots Alliance (WBA)
Despite being one of the essential service providers, Walgreens hasn’t been a market darling. The company’s shares have tumbled more than 40% in the last five years.
Dividends, however, have only increased. In July of 2021, Walgreens boosted its quarterly payout by 2.1% to 47.75 cents per share, marking its 48th consecutive annual dividend increase.
Looking further back, you’ll see that the retail pharmacy giant has paid uninterrupted dividends for more than 88 years.
The company has a growing business to back its rising dividends. In the three months ended Feb. 28, sales from continuing operations rose 3% year over year to $33.8 billion. Meanwhile, adjusted earnings per share grew 25.9% to $1.59.
Today, Walgreens yields 4.7%, a generous amount compared to competitors like CVS Health (2.4%) and Walmart (1.8%).
Unlock the Power of Short Selling for Bigger Returns
Explore the world of short selling with our comprehensive guide. Learn how to turn falling stock prices into profit and elevate your investing strategy today!
Learn MoreAnnaly Capital Management (NLY)
For the real yield hunters, Annaly Capital Management deserves a look.
The company is not nearly as well known as the stocks mentioned above, but it offers a staggering annual yield of 14.9%.
Structured as a real estate investment trust, Annaly is a diversified capital manager. The REIT invests in agency mortgage-backed securities, residential real estate, and middle-market lending.
Shares tumbled more than 50% during the pandemic-induced market crash in early 2020. Since then, Annaly has made a strong recovery. While the stock is not quite back to where it was before COVID, the sheer size of its dividend payments make it stand out.
The REIT reported earnings last month. For Q1, earnings available for distribution came in at 28 cents per share, which covered its dividend 1.25 times.
In the earnings conference call, Chief Financial Officer Serena Wolfe said, “We have, in recent quarters, communicated that we anticipate earnings to moderate, which we still foresee, though we continue to expect earnings to sufficiently cover the dividend for the near term, all things equal.”
What to read next
- Sign up for our Moneywise newsletter to receive a steady flow of actionable ideas from Wall Street's top firms.
- US is only a few days away from an ‘absolute explosion’ on inflation — here are 3 shockproof sectors to help protect your portfolio
- ‘There’s always a bull market somewhere’: Jim Cramer’s famous words suggest you can make money no matter what. Here are 2 powerful tailwinds to take advantage of today
Sponsored
Follow These Steps if you Want to Retire Early
Secure your financial future with a tailored plan to maximize investments, navigate taxes, and retire comfortably.
Advisor is an online platform that can match you with a network of vetted fiduciary advisors who are evaluated based on their credentials, education, experience, and pricing. The best part? - there is no fee to find an advisor.
