There’s something so satisfying about getting dividend payouts deposited into your account. Watching the payouts stack up and compound over time is one of the most rewarding aspects of investing. People tend to gravitate towards dividend stocks because they generate passive income and can signify that a company has enough financial health to return money to shareholders. In an uncertain market, buying a company that has a strong history of dividend growth helps to provide investors with the reassurance that their money is parked in the right place for the long term.
Unfortunately, some investors that are new to dividend stocks end up chasing the highest yield stocks they can find and end up getting burned. This is usually due to the fact that when a company’s dividend payout ratio gets too high to be sustainable, it will often have to cut or eliminate its dividend altogether at some point. That’s why it’s so important to do your research before buying any dividend stocks, especially when they are high-yield. The good news is that we’ve done the hard work for you and created a list of 3 high-yield dividend stocks to buy below.
The first stock on our list is a major pharmaceutical company that currently has a dividend yield of 4.93%. Big pharma companies like this one can be a good pick for dividend investors since they have a strong line-up of best-selling drugs that generate consistent free cash flows. AbbVie is a company that fits the bill and is in a good place financially thanks to products like Humira, which is a popular drug for people with rheumatoid arthritis. It is also a company that has some nice long-term growth potential.
Investors should be impressed by the fact that AbbVie has raised its annual dividend payout for 48 consecutive years and is a dividend aristocrat. It is also a great buy due to the potential of AbbVie’s pipeline, as it has tons of new pharmaceutical products in different phases of clinical trials. In particular, Skyrizi (for plaque psoriasis) and Rinvoq (for rheumatoid arthritis) both look promising and could eventually be best sellers for Abbvie. It looks like biotech stocks aren’t being negatively impacted by the pandemic as much as many investors initially anticipated, which is another reason why AbbVie is a strong buy at this time.
There’s a good chance that you are already familiar with this global information technology company. It’s worth a look thanks to its 5.22% dividend yield and a strong history of generating solid free cash flows, which means that its dividend is safe for the time being. IBM
is a worldwide provider of information technology products and services and its business can benefit from new trends like cloud computing and the digitalization of major companies.
This is another dividend aristocrat that might not be growing its earnings like it once was but will be a reliable dividend-payer for those investors looking for extra income. The company’s Q2 earnings weren’t amazing, but there were some positives such as a 14.7% year-over-year increase in free cash flow to $2.9 billion in Q2. It’s also nice to see a strong balance sheet when buying a high dividend yield stock, and IBM had $14.3 billion of cash on hand at the end of Q2. Although this company faces some challenges related to the pandemic, its attractive dividend yield, strong brand name, and value at these price levels make it worth a look for dividend investors.
Realty Income (NYSE:O)
There are quite a few REITs out there that are not looking like good investments at this time. With the pandemic causing so many retailers to shutter their doors, you need to be extra careful when buying companies whose cash flows are dependent on tenants paying their monthly rent. However, Realty Income is a dividend-paying REIT that is still worth a look even in an uncertain environment for commercial properties. It’s unique in that it pays monthly dividends, which means you can expect more frequent payouts than with most other stocks. With a dividend yield of 4.55%, it is absolutely worth a look for any dividend portfolio.
The reason Realty Income is a REIT that should be on your radar has to do with the properties that make up its portfolio. Realty Income owns over 6,500 properties with a large portion of that made up of dollar, convenience, and drug stores. This is good news since those types of properties will always have a strong demand for their products and services regardless of the state of the economy. Realty Income collected 91.5% of its July rent and is another company with a very strong balance sheet. If you are looking for safety and steady income from a high-yield dividend stock, consider the fact that Realty Income has paid a dividend for 602 consecutive months.
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7 Gold Stocks to Buy Before the Fed Changes Its Mind
Just when investors thought that the price of gold couldn’t go any higher, the Federal Reserve added fuel to the fire. On July 29, the Fed said there was not sufficient evidence of an economic recovery to warrant changing their current policies.
Not only does that mean that interest rates will stay at or nor zero, but that the Fed may initiate other actions as well. In his statement after the Fed meeting, chairman Jerome Powell said the Fed was “not even thinking about thinking about raising rates.”
And while the novel coronavirus was certainly a factor, it’s not the only factor. The Fed is looking intently at the collateral damage from the lockdown measures in March and April. Over 14 million Americans who had jobs in February are unemployed. And many of those jobs will not be coming back.
This is creating the perfect scenario for gold and gold stocks. The price of gold has surged over 25% in 2020. At the time of this writing, it sits at $1,953 per ounce. Of course as soon as gold starts to near $2,000 the cries that the rally is over begin.
Are they right again? Maybe, but I’m a little skeptical. Gold always climbs during times of uncertainty. That’s true today more than ever. We’re months away from a presidential election. We’re learning how to live with a novel virus for which there is no vaccine. We have social unrest that has turned into riots in many major cities.
With that in mind, here are seven of the best gold stocks that you can invest in right now.
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