Investors looking to fill their passive income streams with high-yield dividend stocks have three excellent choices. If you have an extra $100 to invest, you can pay dividends Real estate income (NYSE:O), Altria Group (NYSE:MO)or Pfizer (NYSE:PFE).
All three of these dividend payers have a long history of steady annual dividend increases. Moreover, they offer yields of over 5% at recent prices.
No one expects huge payout increases from these established companies. However, with strong advantages over competitors, there’s a good chance they can maintain their payout streaks long enough to fuel your retirement dreams.
1. Real estate income
Realty Income is a real estate investment trust (REIT) that leases commercial real estate to reputable organizations such as Walmart, Dollar generalAnd Tractor supply company. At recent prices, the stock offers a dividend yield of 5.6% plus a number of features that shareholders like.
Realty Income pays monthly dividends and you never have to wait long for a raise. This REIT increases its payout every quarter and recently announced its 125th payout increase since becoming a publicly traded company about 30 years ago.
Supermarkets, dollar stores and hardware stores have ups and downs, but they are not likely to go out of business during an economic recession. Furthermore, their physical locations are likely to remain relevant despite an ongoing shift to online shopping.
In addition to selecting tenants who can reliably pay rent, Realty Income uses net leases in which all variable costs of building ownership, such as taxes and maintenance, are transferred to the tenant. This makes the company’s cash flows so stable that it has an A3 rating Moodys.
Despite 30 years of operation, there is still plenty of independently owned commercial real estate that could fit into Realty Income’s portfolio. With a credit rating that’s better than the vast majority of its peers, there’s a good chance this REIT can continue to attract quality tenants and grow its dividend until you retire.
2. Altria Group
Cigarette smoking has been on the decline for decades, but this hasn’t stopped Altria Group from steadily increasing its dividend. Last August, the American tobacco giant behind the leading Marlboro brand announced its 58th dividend increase in 54 years.
Despite a long history of consecutive annual dividend payments, the market does not expect Altria Group’s performance to continue. The stock offers an ultra-high yield of 8.5% at recent prices.
The Food and Drug Administration (FDA) has banned flavored e-vapor devices, even though consumers of all ages seem to prefer them. The ban created a huge illegal market, but access to flavored vaporizers like Elf Bar will become more difficult to access, at least in the US, where Altria does business.
In late 2023, the FDA began working with Customs and Border Protection to seize shipments of illegal vaporizers. So far this year, it has also sent warning letters to 61 brick-and-mortar retailers and 22 online retailers for carrying illegal devices.
The increased enforcement of the FDA’s flavor ban is great news for Altria. Last year it acquired NJOY, one of only three FDA-approved e-cigarette brands currently on the market.
3. Pfizer
Shares of pharmaceutical giant Pfizer offer a dividend yield of 5.9% at recent prices. It has the shortest streak on this list, but after 15 consecutive years of increasing its payout, this is a very reliable dividend stock.
Pfizer’s revenue stream grew thanks to sales of Comirnaty, a COVID-19 vaccine, and Paxlovid, an antiviral treatment for COVID-19. Unfortunately, demand for these two products disappeared faster than expected. The stock is under pressure as sales over the past 12 months are down about $50 billion from their 2022 peak.
Pfizer has reinvested its COVID-19 windfall into new revenue streams, and the plan is working well. Despite the loss of most COVID-19 related sales, twelve-month sales are now 45.5% higher than at the start of the pandemic.
Pfizer has reinvested its COVID-19 windfall into new drugs that could allow it to continue increasing its payout for years to come. In addition to the acquisition of Seagen and all four of its marketed cancer therapies, the FDA approved nine new Pfizer drugs last year. Adding a few stocks to a diversified portfolio and holding them through your retirement years seems like a smart move for most income-seeking investors.
Should you invest €1,000 in real estate income now?
Consider the following before purchasing shares in Realty Income:
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Cory Renauer has no position in any of the stocks mentioned. The Motley Fool holds positions in and recommends Moody’s, Pfizer, Realty Income and Walmart. The Motley Fool recommends Tractor Supply. The Motley Fool has a disclosure policy.
3 Reliable Dividend Stocks With Yields Above 5% That You Can Buy Right Now With Under $100 Originally published by The Motley Fool
