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Utility stocks tend to thrive in uncertain economic conditions due to their recession-resistant characteristics. With the Fed keeping rates high and top economists warning of an impending market downturn, these stocks are in for a huge uptrend in the coming months.
Whether in a recession or not, utility stocks are a good choice for income investors looking to build their portfolios through the dividend reinvestment strategy. If you use dividend income today to build a more robust portfolio for the future, you can generate a substantial stream of passive income.
Below are two dividend stocks that may be attractive to the risk-averse investor. Their returns are higher than those of bond market and money market funds, and offer significant upside potential.
National network
National Grid plc (NYSE:NGG) is a multinational electric and gas company with a market capitalization of $40.19 billion. The stock has paid dividends for 17 consecutive years and has a five-year dividend growth rate of 3.36%. The stock currently has a dividend yield of 8.77%, higher than the industry average of 3.35%.
The payout ratio stands at 96%, which is high, but not overly worrying given the company’s strong fundamentals.
AT&T
Another option that can be a good choice for income investors is AT&T Inc (NYSE:T), the largest telecom company in the world by market capitalization. AT&T offers a forward dividend yield of 6.3% with a modest payout ratio of 59.9%.
The company has solid fundamentals to support its dividend payments with growing revenues, improving earnings and a stable free cash flow position. Moreover, the debt burden is manageable and within the sector average.
There are better high yield opportunities in the private markets
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 Note 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 Reliable High-Yield Dividend Stocks That Offer Yields Better Than Money Market Funds originally appeared on Benzinga.com
