A $5,000 investment can be a good amount of money to invest in a stock. It’s so big that if you pick a winner, your returns can be significant, and that can help justify spending a lot of time researching the ideal stocks to invest in. You can also generate quite a bit of dividend income from those types of investments. If you find a stock that yields 5%, that means you will receive $250 per year in dividends.
But you can pursue even more without taking too much risk. Three stocks yielding more than 5% that could be good options for dividend investors today are Enbridge (NYSE: ENB), Ford Motor Company (NYSE:F)And Verizon Communications (NYSE: VZ). Here’s why these stocks should be on your buy list.
1. Enbridge
Enbridge is a leading oil and gas company in North America. The pipelines help connect the continent and transport oil. It plays a vital role in the industry and provides a fairly safe and stable investment to hold. In five years, it has generated a modest 15% return.
While that probably won’t get growth investors too excited, what really makes this Canadian-based oil and gas stock attractive is the dividend it offers. Enbridge yields 6.6%, which would yield about $330 in dividends over the course of a full year if you invested $5,000. The company has also increased its dividend payments for 29 years in a row, with the most recent increase being a 3.1% increase in the dividend last year.
The company has consistently met its targets over the years and its growth prospects look even better since it recently acquired US gas companies, allowing the company to expand and diversify even further. Enbridge posted a profit of CA$5.5 billion on revenue of CA$43.5 billion over the past 12 months. And with an attractive price-to-earnings (P/E) ratio of 22, this could be a solid dividend stock to buy today.
2. Ford Motor Company
Car manufacturer Ford also offers investors a fairly high return of 5.6%. And with a price-to-earnings ratio of just over 11, investors don’t have to pay a big premium to own shares of the company.
Investors may be concerned about the company’s near-term prospects given the potential for a recession ahead, but the leading automaker has performed quite well this year with sales totaling $90.6 billion in the first half , an increase of 4.2% year-on-year. Revenues are down slightly by 0.5%, but overall the company is doing quite well.
The company’s approach to electric vehicles (EVs) is more conservative than rivals Tesla‘s, ensuring that the company can balance growth while still providing its shareholders with a dividend. Ford’s payout ratio is around 63%. By focusing on offering low-cost vehicles, Ford could potentially steal market share from Tesla in the future and be an undervalued EV investment today.
3. Verizon Communications
The list of high-yielding stocks is completed by telecom giant Verizon. The 6.3% yield isn’t normally that high, but given the bearishness in the markets in recent years due to rising interest rates, the stock’s struggles have boosted returns. Verizon’s stock price has fallen 28% in five years, but has been rising lately as the Federal Reserve has cut interest rates and hopes are high that more cuts are on the way.
Verizon is another attractive dividend growth stock, recently announcing it would increase its payout by a modest 1.9%. It is the 18th year in a row in which the telecom company has increased its dividend.
The company also announced plans for an acquisition in September Border communicationthat will allow Verizon to expand its fiber optic network. Frontier has 2.2 million subscribers in 25 states, while Verizon currently has 7.4 million connections through its fiber operations, which span nine states plus Washington, DC. The deal should accelerate Verizon’s sluggish single-digit growth this year and potentially pave the way for bigger dividend increases in the future.
At a relatively modest 16 times earnings, Verizon is yet another cheap dividend stock to buy now.
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*Stock Advisor returns October 14, 2024
David Jagielski has no position in the stocks mentioned. The Motley Fool has and recommends positions in Enbridge and Tesla. The Motley Fool recommends Verizon Communications. The Motley Fool has a disclosure policy.
Do you have $5000? These three high-yielding dividend stocks pay more than 5%. was originally published by The Motley Fool
