When is the best time to buy high-yield dividend stocks? The best answer for income investors is probably as soon as possible. The sooner you invest, the sooner the dividends will start rolling in.
However, some stocks are better than others at different times. As we enter the final quarter of 2024, I think a few stocks stand out in particular. Here are three high-yield dividend stocks to buy first in October.
1. Enterprise Products Partners LP
Enterprise Products Partners LP (NYSE:EPD) is one of the largest providers of midstream energy services in North America. The limited partnership (LP) operates more than 50,000 miles of pipelines, liquids storage facilities, natural gas processing facilities and more.
Income investors have a lot of confidence in Enterprise Products Partners. The yield on term payments is a sky-high 7.2%. In fact, Enterprise has increased its distribution for 26 years in a row.
The midstream company is in a great position to keep distributions flowing and growing. Enterprise Products Partners has a solid balance sheet with respectable A and A3 credit ratings that reflect a low risk of default. Cash flow has also been resilient over the years, even during the financial crisis of 2007 and 2008, the oil price collapse from 2015 through 2017, and the COVID-19 pandemic in 2020 and 2021.
Enterprise Products Partners probably won’t be a high-growth stock, but it still has pretty good growth prospects. The company currently has approximately $6.7 billion of major growth capital projects under construction. U.S. production of crude oil, natural gas and natural gas liquids is expected to increase by the end of the decade, with a significant portion exported to other countries. Demand for Enterprise pipelines and other midstream assets should remain strong.
2. Real estate income
Real estate income (NYSE:O) is the seventh largest real estate investment trust (REIT) in the world. It owns 15,450 commercial properties that are rented to a diversified group of customers from 90 sectors.
The REIT pays a monthly dividend with a forward yield of 5%. Realty Income has increased its dividend for 29 years in a row at a compound annual growth rate (CAGR) of 4.3%.
One key for Realty Income to continue this impressive run is maintaining high occupancy rates. The company has done excellent work on both fronts in the past. Realty Income’s average historical occupancy rate is 98.2%, leading the industry, with the lowest year-end occupancy rate at 96.6%.
Growth shouldn’t be a problem for Realty Income. In the US, the REIT has significant growth potential in consumer-facing medical facilities, data centers, gaming and industrial facilities. Realty Income believes its opportunities are even greater in Europe with a total addressable market (TAM) of $8.5 trillion.
3. United Parcel Service
United Parcel Service (NYSE:UPS) is the largest parcel delivery company in the world. It delivers packages for approximately 1.6 million customers to 10.2 million recipients in more than 200 countries and territories every business day.
UPS’s forward dividend yield is 4.8%. The company has increased its dividend for fifteen years in a row. While UPS’s dividend payout has increased nearly 70% over the past five years, most of that increase came from a big dividend increase in 2022.
Funding the dividend program is one of UPS’s top capital allocation priorities. Excess money after paying dividends and investing in the company is used for stock buybacks. The company recently announced plans to buy back $500 million of stock this year.
UPS returned to US volume growth for the first time in nine quarters in the second quarter of 2024. The acquisition of Estafeta, which is expected to close by the end of the year, will expand its capabilities in Mexico. The company’s focus on healthcare logistics and small to mid-sized businesses should also drive growth.
Should you invest $1,000 in Enterprise Products Partners now?
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Keith Speights holds positions at Enterprise Products Partners, Realty Income and United Parcel Service. The Motley Fool holds positions in and recommends Realty Income. The Motley Fool recommends Enterprise Products Partners and United Parcel Service. The Motley Fool has a disclosure policy.
Three High-Yield Dividend Stocks to Buy with Hand Over Fist in October were originally published by The Motley Fool
