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Since 2012, the value of high-yield stocks and exchange-traded funds (ETFs) has fallen. Rising interest rates have made bonds, government bonds and CDs more attractive. If inflation remains high, this trend is likely to continue until 2024.
However, buying high-yield stocks and ETFs can be a smart move if you think interest rates will fall in the future.
Notable high yield options currently include Real estate income (NYSE:O), VICI properties (NYSE:VICI), JPMorgan Equity Premium Income ETF (NYSE:JEPI) and JPMorgan Nasdaq Equity Premium Income ETF (NASDAQ:JEPQ).
2 real estate stocks to buy for high returns
Realty Income and VICI Properties are prominent real estate stocks with attractive returns.
Real Estate Investment Trusts (REITs) buy properties, rent them out and distribute the rental income to their investors. To qualify for favorable tax treatment, REITs must distribute at least 90% of their taxable income as dividends.
Rising interest rates have made real estate purchases and debt issuance more expensive, causing many REITs to suffer recently. However, the REIT market is expected to recover in the long term as interest rates gradually decline.
Realty Income has maintained an occupancy rate of over 96% for more than thirty years and leases its properties to recession-proof retailers including 7-Eleven, Dollar General, Dollar Tree and Walmart.
Realty Income, known for its monthly dividends, has increased its payout 124 times since going public in 1994. The stock was valued at 13 times last year’s adjusted funds from operations (FFO) and has a forward dividend yield of 5.9%.
With major tenants such as Caesars Entertainment, MGM Resorts, Penn Entertainment and Century Casinos, VICI Properties specializes in casino and entertainment properties in the United States and Canada.
VICI insures tenants with multi-decade contracts and has maintained a 100% occupancy rate since its IPO in 2018. It offers a dividend yield of 5.9% and trades at 13 times adjusted FFO, although it pays dividends quarterly rather than monthly.
2 ETFs for stability and attractive monthly dividends
The JPMorgan Equity Premium Income ETF and the JPMorgan Nasdaq Equity Premium Income ETF are well-known high-yield ETFs. Both ETFs use equity-linked notes (ELNs) linked to covered calls and have a low expense ratio of 0.35%.
The JPMorgan Equity Premium Income ETF, which includes 130 stocks, writes monthly calls on the S&P 500 each month. The JPMorgan Nasdaq Equity Premium Income ETF, which includes 98 stocks, writes monthly calls on the Nasdaq-100.
The Equity Premium Income ETF yields 7.5% annually, compared to 10.9% for the Nasdaq ETF. This difference is due to the higher volatility of the Nasdaq 100 compared to the S&P 500, which generates more from covered calls.
Both ETFs use covered calls, which limits their gains in strong markets. However, they offer stable monthly payments that are higher and less volatile than other dividend-focused ETFs.
Looking for opportunities with higher returns?
The current high interest rate environment has created an incredible opportunity for income-seeking investors to earn huge returns, but not through dividend stocks… Certain private market real estate investments offer retail investors the opportunity to take advantage of these high-yield investments. possibilities and Benzinga has identified some of the most attractive options for you.
For example, Basecamp Alpine Notes offers a target APY of 9% with a term of just three months, making it a powerful short-term cash management tool with incredible flexibility. EquityMultiple has issued 61 Alpine Notes Series and has met all payment and financing obligations with no missed or late interest payments. With a low minimum investment of just $1,000, Basecamp Alpine Notes makes it easier than ever to start building a high-yield portfolio.
Don’t miss this opportunity to take advantage of high-yield investments while interest rates are high. See Benzinga’s favorite high-yield deals.
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This article 2 Dividend Stocks and 2 ETFs for Consistent, Reliable Income originally appeared on Benzinga.com
