Investors can earn returns in stocks through share-price appreciation or dividend payments, and one way to find dividend-paying stocks with price upside is by reviewing Wall Street analyst ratings on stocks and comparing them to their dividend yields.
Dividend investors often face a choice between high-yield stocks that offer more immediate income and low-yield stocks with faster dividend growth, but finding stocks that offer both can be challenging, with only a few rare "dividend unicorns" meeting these criteria, such as Arbor Realty Trust, Clearway Energy, NextEra Energy Partners, and VICI Properties.
### Summary
Wall Street analysts recommend dividend stocks as a defensive move against potential economic downturns, highlighting Brookfield Renewable Partners and Diamondback Energy as appealing options with promising outlooks.
Dividend stocks have a track record of outperforming non-dividend paying stocks, and investors can generate $100 in monthly dividend income by investing in AGNC Investment, PennantPark Floating Rate Capital, and Realty Income.
Realty Income's shares have hit a one-year low, but the REIT's strong operating performance, dividend coverage, and diverse real estate portfolio make it an attractive investment with a 5.6% dividend yield.
High-quality dividend stocks, which have been market favorites in recent years, are currently not receiving much respect but now may be a good time to buy.
Verizon, Medtronic, Hasbro, Dell, and Walmart are highlighted as attractive dividend stocks by Wall Street analysts, offering investors potential income and long-term returns.
Dividend-paying stocks, particularly dividend growth stocks like Brookfield Renewable and Enbridge, have consistently outperformed non-dividend payers, offering above-average returns and low risk due to their stable cash flows and long-term contracts.
The Southern Company, Oneok, and Public Storage are exceptional dividend stocks that have consistently paid stable dividends and increased their payouts, making them highly attractive for investors looking for reliable and growing income.
Investors are turning to high-yield dividend stocks like OneMain Holdings and Kimbell Royalty Partners as defensive plays in response to market uncertainty caused by factors such as the Federal Reserve's interest rate policy, potential government shutdown, declining consumer confidence, and a surge in oil prices.
Three stable dividend stocks that can be solid investments for retirement are Bristol Myers Squibb, Apple, and Verizon Communications, with Bristol Myers Squibb offering a high yield and a diverse business, Apple having potential for future dividend increases, and Verizon Communications having the highest yield and a track record of increasing dividends.
Investors may want to consider increasing exposure to dividend stocks, such as those in the S&P Dividend Aristocrats, as rising long-term interest rates have the potential to push the broad stock market down again.
Investing in dividend stocks has historically provided higher returns than stocks that don't pay dividends, and three high-yield stocks with sustained payouts that can generate $500 in annual dividend income from a $5,400 investment include AT&T, PennantPark Floating Rate Capital, and Innovative Industrial Properties.
Summary: Morgan Stanley recommends investors turn to dividend-paying stocks, as they have historically outperformed non-dividend stocks during market downturns. They have identified 26 dividend stocks that could see shares rise up to 85% in the coming months.
Dividend stocks are a good option for investors seeking stable income or a hedge against inflation, but it's important to choose stocks with above-market dividend yields and strong dividend growth rates for optimal capital appreciation and income generation.
The article mentions Altria Group (NYSE:MO) as the stock in focus. The author's recommendation is to buy or hold the stock. The key information and data provided are as follows:
- Altria Group's shares have declined -8.66% year-to-date and are approaching a long-term resistance level of $40 per share.
- Altria is considered the King of the Dividend Kings with a yield exceeding 9%.
- Despite challenges such as regulatory issues and health-conscious consumers, the author believes it is a good time to start a position or add to an existing position in Altria.
- The financial statements of Altria show impressive numbers, with high revenue, gross profit margin, net income, and free cash flow.
- Altria has a history of increasing its dividend annually and recently increased its dividend by 4.3%.
- Based on projections, the dividend could increase by 34.27% through the end of the decade.
- Altria is trading at an attractive valuation compared to other top yielding Dividend Kings.
- The stock is facing a long-term resistance level at $40, but if it holds, it could rebound to the mid $40s.
- The author identifies three external catalysts that could help Altria in the future: the disappearance of ESG investment products, potential benefits from Altria's investment in cannabis, and a favorable rate environment for dividend stocks.
- The author acknowledges the risks associated with investing in Altria, including regulatory threats and changing consumer preferences towards healthier lifestyles.
Overall, the author's core thesis is that Altria presents a strong opportunity for income investors due to its high yield, profitability, dividend growth, and potential catalysts. The author believes that as the interest rate environment becomes more favorable for dividend stocks, capital will flow back into Altria and make it an attractive investment.
Dividend-paying stocks, such as Exxon Mobil, Coterra Energy, Brookfield Infrastructure Partners, American Electric Power, and Darden Restaurants, are being recommended as attractive options for investors due to their strong earnings, cash flows, and dividend growth.
Investing in ultra-high-yield financial stocks such as AGNC Investment, PennantPark Floating Rate Capital, and U.S. Bancorp can provide investors with a reliable and substantial stream of dividend income.
Investors looking for passive income without relying on stock prices should consider dividend stocks such as Kinder Morgan, 3M, and Clearway Energy, which offer high dividend yields of 7%, 6.8%, and 5.3% respectively.
Contrarian income investors are finding opportunities to "lock in" bigger dividend yields by investing in stock-focused closed-end funds, with many of these income plays paying Treasury-doubling 10% yields now, as consumer spending remains strong and interest rates remain manageable.
