Realty Income (O)

Real estate investment trusts (REITs) are known for providing oversized dividends. But like any other sector, dividends from real estate companies aren’t carved in stone.

When it comes to paying reliable dividends, one real estate stock stands out: Realty Income.

Realty Income is a REIT with a diverse portfolio of over 11,000 commercial properties located in all 50 states, Puerto Rico, the UK and Spain. It leases them to around 1,090 different tenants operating across 70 industries.

This means even if one tenant or industry enters a downturn, the impact on company-level financials will likely be limited.

Realty Income has been paying uninterrupted monthly dividends since its founding in 1969. That’s 623 consecutive monthly dividends paid.

Since the company went public in 1994, it has announced 116 dividend increases. The stock currently yields 4.4%.

Last week, Credit Suisse analyst Omotayo Okusanya initiated coverage of Realty Income with an ‘outperform’ rating. His price target of $75 implies a potential upside of 9%.

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Chevron (CVX)

Energy stocks have turned out to be big winners amid the oil price boom. Chevron, for instance, is up 21% in 2022, in stark contrast to the broad market’s double-digit decline.

As an oil and gas supermajor, Chevron’s business is firing on all cylinders. For Q1, the company reported earnings of $6.3 billion, which more than quadrupled the $1.4 billion in the same period last year. Revenue totaled $54.4 billion for the quarter, up 70% year over year.

In January, Chevron’s board approved a 6% increase to the quarterly dividend rate to $1.42 per share. That gives the company an annual dividend yield of 3.9%.

Orman sees further upside in oil but warns that energy stocks can be volatile.

“Oil will go up to about $135, maybe $145 a barrel. But you need to watch your oil stocks carefully because it can turn on a dime,” she says.

Earlier this month, Cowen analyst Jason Gabelman reiterated an ‘outperform’ rating on Chevron while raising his price target from $165 to $179 — roughly 22% above where the stock sits today.

AT&T (T)

We pay our cell phone bills and Internet bills every month. If you want to get even, consider collecting dividends from companies that provide these services.

AT&T, for instance, is one of the largest telecommunications companies in the world. More than 100 million consumers in the U.S. use its mobile and broadband services. At the same time, the company also serves nearly all of the Fortune 1000 companies with connectivity and smart solutions.

And because wireless and Internet services are necessities for the modern economy, AT&T generates a recurring business through thick and thin.

The company pays quarterly dividends of 27.75 cents per share, translating to an annual yield of 5.3%. To put things in perspective, the average S&P 500 company yields just 1.6%.

Tigress Financial analyst Ivan Feinseth has a ‘buy’ rating on AT&T and a price target of $28. Considering that the stock trades at around $20.90 today, his price target implies a potential upside of 34%.

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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