As the year draws to a close, investors are celebrating the remarkable performance of the broader stock market, with the S&P 500 and Nasdaq Composite both boasting gains of over 20% year to date. Despite this impressive showing, savvy investors know that finding value in the market can be a challenge, especially when many stocks are trading at all-time highs. However, there are still opportunities to be found in dividend-paying stocks and exchange-traded funds (ETFs) that offer a compelling combination of income and growth potential.
Two Dividend Kings, PepsiCo and American States Water, have demonstrated an unwavering commitment to their shareholders, with over 50 consecutive years of dividend payments and increases. Meanwhile, the Global X SuperDividend ETF provides a diversified portfolio of high-yield stocks, offering a monthly distribution to investors.
PepsiCo, a stalwart in the consumer staples sector, boasts a rare blend of reliability, high yield, and value. With a dividend yield of 3.2% and a P/E ratio of 24.7, it stands out as a rare gem in a sector where valuations have been pushed to lofty heights. Despite facing challenges in recent years, PepsiCo’s strong brand portfolio, including Frito-Lay and Quaker Oats, positions it for long-term success.
American States Water, a utility with an unparalleled 70-year streak of consecutive dividend raises, offers a reliable stream of passive income. Its regulated business model and long-term contracts with U.S. military bases provide a stable foundation for growth, with a forward-yielding dividend of 2.3%. The company’s focus on hiking its payout at a rate commensurate with its earnings growth demonstrates a responsible approach to rewarding shareholders.
For investors seeking a diversified approach to high-yield investing, the Global X SuperDividend ETF offers an attractive solution. By tracking the 50 highest-yielding U.S. equities, the fund provides a monthly distribution to investors, with a current yield of 6.1%. While its mechanical strategy may result in an unintentional sector bias, the fund’s focus on interest-rate sensitive stocks makes it an appealing option for income-seeking investors.
In a market where value can be hard to find, these three options offer a compelling combination of income and growth potential. Whether you’re seeking the reliability of a Dividend King or the diversification of an ETF, there are still opportunities to be found in the market for savvy investors willing to dig deeper.
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