JPMorgan Chase (JPM)

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East pop / Shutterstock

Let’s start with a bank stock.

With inflation running hot, people are concerned about interest rate hikes from the Fed. But as it turns out, banks typically do well in a rising interest rate environment.

JPMorgan Chase is the largest U.S. bank, with a whopping $3.8 trillion in assets. The stock won a lot of investor attention, gaining 70% over the past year.

Business has improved a lot since the pandemic’s early days in 2020. In Q3 of 2021, JPMorgan produced $3.74 per share in earnings, marking a 28% increase from the $2.92 per share earned in the year-ago period.

In June, the bank announced an 11% increase to its quarterly dividend rate to $1 per share.

It currently yields 2.3%, which is Pandemic stimulus checks helped millions of Americans through tough times. But if you’re hoping for a fourth one, you’ll be disappointed. Uncle Sam doesn’t seem in a rush to provide more broad stimulus payments.

Dividend checks, on the other hand, remain plentiful. Sure, the stock market’s rally over the past several years means most companies aren’t yielding as high as before.

higher than what’s offered at Goldman Sachs (1.9%), Bank of America (1.7%) and Wells Fargo (1.6%), but below Morgan Stanley (2.7%).

While JPMorgan shares trade at over $170 apiece, you can get a slice of the bank using a popular stock trading app that allows you to buy fractions of shares with as much money as you’re willing to spend.

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Walgreens Boots Alliance (WBA)

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Despite the market frenzy, not every stock was going up. Walgreens, for instance, has tumbled more than 40% in the last five years.

Dividends, on the other hand, have only increased. In July, Walgreens boosted its quarterly payout by 2.1% to about 48 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 Aug. 31, sales from continuing operations rose 12.8% year over year to $34.3 billion. Meanwhile, adjusted earnings per share grew 29.5% to $1.17.

Today, Walgreens yields 4.1%, a generous amount compared to competitors like CVS Health (2.2%) and Walmart (1.5%).

Annaly Capital Management (NLY)

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@jacobandrews64/ Twenty20

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 10.4%.

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 early last year. Since then, Annaly has made a strong recovery, and the stock is almost back to where it was before COVID.

The REIT reported earnings last week. For Q3, earnings available for distribution came in at 28 cents per share, which covered its dividend 1.3 times.

In the earnings conference call, Chief Investment Officer and CEO David Finkelstein said, “We feel good about where earnings are this quarter, and we feel good about covering the dividend into 2022, certainly.”

While commercial real estate to has always been reserved for a few elite investors, outperforming the S&P 500 over a 25-year period, First National Realty Partners allows you to access institutional-quality commercial real estate investments — without the leg work of finding deals yourself.

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Collect rent checks without being a landlord

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Owning real estate is one of the oldest ways to earn a passive income.

But you don’t need to be a landlord to collect rent checks. And you don’t have to limit yourself to the stock market.

For instance, some popular investing services let you lock in a steady rental income stream by investing in premium real estate — from commercial developments in L.A. to residential buildings in NYC.

You’ll gain exposure to high-end properties accessible to big-time real estate moguls.

And the best part? You'll receive regular payouts in the form of quarterly dividend distributions without any headaches or hassles.

Fine art as an investment

Stocks can be volatile, cryptos make big swings to either side, and even gold is not immune to the market’s ups and downs.

That’s why if you are looking for the ultimate hedge, it could be worthwhile to check out a real, but overlooked asset: fine art.

Contemporary artwork has outperformed the S&P 500 by a commanding 174% over the past 25 years, according to the Citi Global Art Market chart.

And it’s becoming a popular way to diversify because it’s a real physical asset with little correlation to the stock market.

On a scale of -1 to +1, with 0 representing no link at all, Citi found the correlation between contemporary art and the S&P 500 was just 0.12 during the past 25 years.

Earlier this year, Bank of America investment chief Michael Harnett singled out artwork as a sharp way to outperform over the next decade — due largely to the asset’s track record as an inflation hedge.

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About the Author

Jing Pan

Jing Pan

Investment Reporter

Jing is an investment reporter for MoneyWise. Prior to joining the team, he was a research analyst and editor at one of the leading financial publishing companies in North America. An avid advocate of investing for passive income, he wrote a monthly dividend stock newsletter for the better half of the past decade. Jing holds a Master’s Degree in Economics and an Honours Bachelor of Science Degree, both from the University of Toronto.

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