This has been a great year for stocks. The benchmark from the end of 2023 until November 12 S&P500 index climbed 25% higher.
The benchmark index rose much faster than most dividend payers have been able to increase their dividend payments. As a result, the average stock in the S&P 500 offers an uninspiring return of 1.2%.
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Most dividend payers offer uninspiring returns, but Brookfield Infrastructure(NYSE: BIPC)(NYSE: BIP), Real estate income(NYSE:O)And Royalty Pharma(NASDAQ: RPRX) offer yields of over 3% at recent prices, and you don’t have to be rich to take advantage of them. Just $130 is enough to buy one share of each.
This is why there is a good chance that the high returns they offer will continue to grow throughout your retirement.
There are two ways to invest in this high-yield dividend payer. Brookfield Infrastructure Corp. shares. (BIPC) offer a dividend yield of 3.8%. If you’re prepared for the complex tax implications that come with master limited partnerships, Brookfield Infrastructure Partners (BIP) offers a more attractive yield of 4.7% at recent prices.
Whether you’re talking about energy, water, freight or data, Brookfield Infrastructure manages global assets that facilitate their movement and storage. With huge amounts of data and energy resources, this is one of the safest ways to invest in a surprisingly inefficient artificial intelligence (AI) revolution that consumes a huge amount of electricity.
Despite the strong AI tailwinds, Brookfield Infrastructure is relatively cheap, at just 5.1 times funding from operations (FFO). Third quarter FFO increased 7% year over year and management expects more growth. The company’s backlog of growth projects was nearly $8 billion at the end of September.
Realty Income is a large real estate investment trust (REIT) with more than 15,000 commercial properties leased by companies such as Wal vegetables And Dollar general. At recent prices, it offers a large dividend yield of 5.5%.
This REIT is perfect for investors who value reliability. The company recently paid a monthly dividend for the 653rd consecutive time. Investors looking for income will also be happy to hear that Realty Income has increased its payout for 30 consecutive years.
One reason Realty Income is so predictable is its large and diverse portfolio. Dollar General is the largest customer, but is responsible for only 3.3% of the total rental payments expected in the coming year. It is also geographically diverse, with 14.6% of its portfolio in Europe.
Realty Income’s monthly dividend program is on sound financial footing and positioned to generate profits in the coming years. Adjusted FFO for the third quarter increased 2.9% year over year to $1.05 per share. That is much more than is needed to meet the obligation, which is currently set at $0.7905 per share, per quarter.
An A3 rating of Moodys allows the REIT to borrow at low rates that most of its competitors can only dream of. With resources that allow Realty Income to stay ahead of the competition, even cautious investors can confidently pick up some stocks and hold them for at least the next decade.
If there’s one corner of the economy that investors can count on for steady growth, it’s pharmaceutical sales. Prescription drug spending in the US increased 8.4% to $406 billion in 2022, and this figure could continue to rise at a high single-digit rate for the foreseeable future.
Developing new drugs can be an extremely risky endeavor, but not in the way Royalty Pharma does. This specialty lender provides relatively small loans to drug manufacturers who are developing new products but do not have sufficient capital to carry out a successful launch. The company offers upfront money for drugs still in development and drugs that have already been approved in exchange for a royalty percentage.
Royalty Pharma’s track record is commendable. Since its founding in 1996, it has acquired royalty interests in more than 80 medicines. Some of its investments have not paid off, but 15 products for which it has royalty rights generate annual sales of more than $1 billion.
Royalty Pharma offers a dividend yield of 3.2% at recent prices, and investors can expect much more in ten years. The company’s winners contribute more than enough to offset incidental losses, and portfolio growth accelerates.
In 2022, Royalty Pharma announced a plan to complete acquisitions worth between $10 billion and $12 billion by 2027. The company has already announced $10.1 billion in royalty acquisitions. All of these new investments could continue to boost portfolio income.
A larger portfolio does not guarantee accelerating gains. However, given the track record of this specialist lender, adding a few stocks now to a diverse portfolio and holding them for at least a decade seems like the right move.
Consider the following before purchasing shares in Brookfield Infrastructure Partners:
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Cory Renauer has no positions in any of the stocks mentioned. The Motley Fool holds positions in and recommends Realty Income. The Motley Fool recommends Brookfield Infrastructure Partners. The Motley Fool has a disclosure policy.
3 High-Yield Dividend Stocks You Can Buy Now for $130 and Hold for at Least 10 Years was originally published by The Motley Fool
