Unlock Attractive Dividend Yields with These Three Stocks
As the stock market continues to soar, dividend yields have taken a hit. With the S&P 500’s average payout dwindling to 1.25%, investors are seeking alternative sources of income. Fortunately, there are still opportunities to tap into high, sustainable dividends and capitalize on stock price growth.
AT&T: A Surprising Choice with Promise
At first glance, AT&T’s recent dividend history may raise eyebrows. In 2022, the company ended a 35-year streak of payout hikes, slashing the dividend by 45%. However, the dividend has held steady since then, yielding 4.8% at current prices. Despite carrying a massive total debt of $129 billion, AT&T has made progress in reducing its debt by $8 billion over the past nine months. With a forecasted $17 billion to $18 billion in free cash flow for 2024, the company can comfortably cover its $8 billion annual dividend cost.
Innovative Industrial Properties: A Cannabis-Related REIT with Upside
Buying a cannabis-related REIT like Innovative Industrial Properties may seem counterintuitive, especially given the Republican sweep in the 2024 elections. However, IIP has proven its ability to manage properties effectively, even amidst challenges with non-paying tenants. The company has consistently hiked its dividend since 2017, yielding 7.2% annually. With a discounted stock price, IIP offers a compelling opportunity to capitalize on its massive dividend yield and potential recovery.
Realty Income: A REIT with a Proven Track Record
Realty Income specializes in single-tenant commercial properties, renting them on a net lease arrangement. This approach allows the company to retain more revenue as profit. With nearly 99% of its properties occupied, Realty Income continues to grow its revenue through acquisitions and development. Although higher interest rates have weighed on the stock, the lower price has increased the dividend yield to 5.6%. The company’s dividend has increased annually since 1994, making it an attractive choice for income-seeking investors.
These three stocks offer a unique combination of high dividend yields and potential for stock price growth. With a budget of $3,000, investors can spread their investment across these stocks, generating a quick stream of dividend income without sacrificing long-term growth potential.
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