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Can you make a living off of dividends? This is perhaps the most frequently asked question on Reddit’s dividend discussion forums, where hundreds of people share their experiences with income investing and ask for advice. About nine months ago, someone asked /dividends, a Reddit community with over 570,000 members, whether it’s possible to make a living off of your dividend investments. While there were many interesting responses, one caught our attention.
A Redditor responded that he is 59 and has invested about $250,000 in dividend stocks after the crash caused by the COVID-19 pandemic. He said that the market recovery has strengthened his portfolio and that he has invested about $200,000 more. He claimed that he brings in about $70,000 a year in dividend income. Most of the stocks in his original portfolio were in the oil and gas industry, but he later diversified into other sectors. The Redditor was generous enough to name the specific stocks in his portfolio. Let’s take a look at these companies.
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Sunoco LP
Sunoco LP (NYSE:SUN) is a Texas-based MLP energy company with a dividend yield of about 6.8%. Last month, the company reported strong second-quarter results that beat estimates for both earnings and revenue. In May, Sunoco completed its $7.3 billion acquisition of NuStar. In June, Citi upgraded shares of SUN to Buy from Neutral with a $65 price target.
ExxonMobil
With over 40 years of consecutive dividend increases and a dividend yield of 3.4%, Exxon Mobil Corp (NYSE:XOM) is one of the best dividend stocks in the Redditor’s portfolio, generating a dividend income of $70,000 per year. Exxon Mobil continues to invest in fossil fuel opportunities, believing that more than 50% of global energy demand will be met by oil and gas as late as 2050. However, the company is investing in carbon capture and clean energy. By 2030, Exxon expects to produce 40 million tons of LNG annually, more than double its current production.
Crossamerica Partners LP
Crossamerica Partners LP (NYSE:CAPL) distributes motor fuels with a dividend yield of about 10%. The company reported second-quarter results in August, with GAAP EPS beating Wall Street estimates. However, revenue fell 1.7% year over year, missing Wall Street forecasts by $140 million.
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Crestwood Equity Partners (now part of Energy Transfer)
Crestwood Equity Partners was an energy infrastructure company that was acquired by Energy Transfer last year for about $7.1 billion. The Redditor said he bought this stake in 2020 and that it was later merged with Energy Transfer (ET).
Altria Group
With a 7.5% yield and more than 50 years of consecutive dividend growth, Altria Group Inc. (NYSE:MO) is one of Redditors’ favorite sources of income. Despite concerns about the future of its smokable products amid a global decline in smoking, Altria remains a reliable dividend stock. In August, it raised its dividend by 4.1%. The company’s latest quarterly results show that its smokeless and oral tobacco products are starting to offset declines in smokables.
Pfizer
Pfizer Inc. (NYSE:PFE) has a dividend yield of over 5% and has increased its payouts for 15 consecutive years. With a strong pipeline and strength in the pharmaceutical market, Pfizer is a reliable dividend stock for any portfolio. Pfizer spends approximately $2.5 billion to $3 billion on research and development each quarter and has more than 110 candidates in its pipeline.
The Redditor, who said he makes about $70,000 a year in dividends, said he added Pfizer later in his investing career to create more diversification.
Johnson & Johnson
Johnson & Johnson (NYSE:JNJ) is one of the best dividend stocks, with more than six decades of consistent payout growth. Despite litigation-related headwinds, the sheer size and diversity of its income stream make Johnson & Johnson an attractive source of income. In July, Johnson & Johnson posted strong quarterly results, beating estimates for both revenue and earnings per share (EPS). MedTech and Oncology businesses posted decent YoY revenue growth.
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This article Dividend Investor Making $70,000 a Year Shares His Portfolio: Top 7 Stocks originally appeared on Benzinga.com
