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Yahoo
04-04-2025
- Business
- Yahoo
3 No-Brainer Ultra-High-Yield Dividend Stocks to Buy in April
Wall Street offers investors no shortage of ways to grow their wealth. With thousands of publicly traded companies and exchange-traded funds (ETFs) to choose from, pretty much everyone is assured of finding one or more securities that'll help them meet their investment goals. But among these countless avenues investors can take, few have proved more successful over long periods than buying and holding high-quality dividend stocks. Businesses that pay a regular dividend to their shareholders typically have a few things in common. They're often: Profitable on a recurring basis. Time-tested in the sense that they've successfully navigated one or more recessions. Capable of providing a transparent long-term growth outlook. In other words, these are companies that investors can hold stakes in without losing sleep at night. But most importantly, they're, collectively, outperformers. In The Power of Dividends: Past, Present, and Future, the researchers at Hartford Funds, in collaboration with Ned Davis Research, compared the performance of dividend stocks to non-payers over a 50-year stretch (1973-2023). What they found was income stocks more than doubled up the non-payers on an annualized return basis -- 9.17% for the dividend stocks vs. 4.27% for the non-payers -- and did so while being less-volatile than the benchmark S&P 500. With the S&P 500 and Nasdaq Composite both falling into correction territory in March, anchoring your portfolio with dividend stocks can be an especially smart move. What follows are three ultra-high-yield dividend stocks -- sporting an average yield of 9.87% -- which make for no-brainer buys in April. The first supercharged dividend stock that can be confidently scooped up by investors to begin the second quarter is mortgage real estate investment trust (REIT) Annaly Capital Management (NYSE: NLY). Although Annaly's nearly 13.8% yield might sound unsustainable, it's averaged a roughly 10% yield over the last two decades and has declared approximately $27 billion in dividends since its October 1997 initial public offering. Mortgage REITs might very well be Wall Street's most-disliked industry. They're highly sensitive to interest rate changes, as well as the velocity of moves made the by nation's central bank. The Federal Reserve rapidly increasing in its federal funds rate from March 2022 to July 2023, coupled with an inversion of the Treasury yield curve, drove up short-term borrowing costs and weighed down net interest margin and book value for Annaly and its peers. The good news for Annaly Capital Management is the central bank is now in the midst of a rate-easing cycle. Moreover, the Fed is walking on eggshells when it comes to shifting its monetary policy. The more telegraphed and deliberate the Fed is with its rate adjustments, the more time Annaly and its peers will have to adjust their asset portfolios to maximize profitability. Additionally, Annaly Capital Management predominantly deals with agency securities in its $80.9 billion portfolio. An "agency" asset is backed by the federal government in the event that the underlying instrument (in this case, mortgage-backed securities (MBS)) were to default. While this added protection pushes down the yields Annaly nets on the MBSs it buys, it also opens the door to the use of leverage to pump up its profitability. With yield-curve inversions lessening, the Fed no longer involved in MBS purchases, and mortgage REITs historically performing their best when interest rates are declining, the table is set for Annaly Capital Management's net interest margin and book value to climb. A second ultra-high-yield dividend stock that makes for a no-brainer buy in April is top-tier retail REIT, Realty Income (NYSE: O). Realty Income, which doles out its dividend on a monthly basis, has increased its payout for 110 consecutive quarters. Though the prospect of a U.S. recession has weighed on retail stocks, Realty Income is ideally positioned to take advantage of the long-term growth of the U.S. economy. Its key advantage can be found in the composition of its commercial real estate (CRE) portfolio. It closed out 2024 with 15,621 CRE properties, approximately 91% of which are, per Realty Income, "resilient to economic downturns and/or isolated from e-commerce pressures." If investors dig into which companies and industries Realty Income leases to, they'll find that they're predominantly brand-name businesses in stand-alone locations that drive traffic to their stores in any economic climate. For example, even if the U.S. were to fall into a recession, consumers are still going to visit grocery stores, drug stores, dollar stores, convenience stores, and automotive service locations, all of which among the top industries by annualized contractual rent in Realty Income's CRE portfolio. Vetting and contract length matter, too. A very low percentage of the company's lessees fail to pay their rent, and most tend to lock in their rental agreements for long periods. There's little concern about frequent turnover, and the company's funds from operations is highly predictable. Realty Income is also historically inexpensive, relative to its future cash flow. Over the trailing-five-year period, shares have averaged a multiple to cash flow of roughly 16.2. But based on the consensus Wall Street forecast for 2026 cash flow, investors can pick up shares of Realty Income right now for 22% below this five-year average. The third no-brainer ultra-high-yield dividend stock to buy in April is coal producer Alliance Resource Partners (NASDAQ: ARLP). Yes, I did say "coal," and also yes, the company's yield of more than 10% has been sustainable. When this decade began, coal stocks were believed to be as good as dead. The push toward clean-energy solutions, such as solar and wind, were expected to meaningfully reduce demand for dirtier fuels. But when the COVID-19 pandemic struck, it tipped the scales back toward time-tested energy sources. Even though the spot price of coal is now well off of its pandemic high, Alliance Resource has enjoyed a resurgence in demand. Three factors allow this relatively little-known coal producer to stand out from its peers. First, management has done an excellent job of locking in volume and price commitments years in advance. Securing deals when the price of coal was higher than it is now will ensure consistent operating cash flow for years to come. It also leads to a level of cost and cash flow transparency that most mining-oriented companies lack. Secondly, the company's management team has historically taken a very conservative approach when expanding production. Even when the per-ton coal price rocketed higher during the pandemic, Alliance Resource Partners' management team edged production higher. While many peers have struggled under the weight of crippling debt, Alliance Resource ended 2024 with only $221.4 million in net debt. Its financial flexibility is superior to other coal producers. The third variable that makes Alliance Resource Partners special has been its foray into oil and natural gas royalties. Diversifying its operations into oil and gas allows the company to take advantage of pure increases in the spot price of two core energy commodities. At an estimated 8.5 times forward-year earnings, Alliance Resource Partners' stock remains a solid value amid a historically pricey market. Ever feel like you missed the boat in buying the most successful stocks? Then you'll want to hear this. On rare occasions, our expert team of analysts issues a 'Double Down' stock recommendation for companies that they think are about to pop. If you're worried you've already missed your chance to invest, now is the best time to buy before it's too late. And the numbers speak for themselves: Nvidia: if you invested $1,000 when we doubled down in 2009, you'd have $285,647!* Apple: if you invested $1,000 when we doubled down in 2008, you'd have $42,315!* Netflix: if you invested $1,000 when we doubled down in 2004, you'd have $500,667!* Right now, we're issuing 'Double Down' alerts for three incredible companies, and there may not be another chance like this anytime soon.*Stock Advisor returns as of April 1, 2025 Sean Williams has positions in Annaly Capital Management. The Motley Fool has positions in and recommends Realty Income. The Motley Fool has a disclosure policy. 3 No-Brainer Ultra-High-Yield Dividend Stocks to Buy in April was originally published by The Motley Fool Sign in to access your portfolio
Yahoo
28-02-2025
- Business
- Yahoo
Wall Street's Greatest Dividend Stock Just Made History Again -- and 99.9% of Investors Have Never Heard of This Small-Cap Company
For more than a century, Wall Street has been a wealth-building machine for professional and everyday investors. With thousands of publicly traded companies and exchange-traded funds (ETFs) to choose from, it's a near-certainty that one or more securities can help you meet your financial goals. But among these countless strategies investors can deploy to grow their wealth, few have proved more consistently successful than buying and holding high-quality dividend stocks. Companies that pay a regular dividend to their shareholders often have similarities. In no particular order, dividend stocks: Tend to be profitable on a recurring basis. Have navigated one or more economic downturns and demonstrated that they're operating model is time-tested. Can provide transparent long-term growth outlooks. Best of all, companies that pay a regular dividend have handily outperformed nonpayers over the long run. In The Power of Dividends: Past, Present, and Future, the analysts at Hartford Funds, in collaboration with Ned Davis Research, compared the performance and relative volatility of dividend stocks to nonpayers over a 50-year period (1973-2023). What they found was that dividend stocks ran circles around nonpayers -- 9.17% annualized return vs. 4.27% annualized return -- and did so while being notably less volatile than the benchmark S&P 500. Whereas nonpayers were 18% more volatile than the S&P 500 over a half-century, income stocks were 6% less volatile. Despite this outperformance, there's more to a great dividend stock than simply offering a payout. While dividend stocks are a dime a dozen, great income stocks are exceedingly rare and not always obvious. Out of the roughly 2,000 publicly traded companies that have paid a dividend over the trailing year, fewer than five dozen qualify as Dividend Kings. A Dividend King is a public company that's increased its base annual payout for at least 50 consecutive years. For instance, a little more than a week ago, consumer staples juggernaut Coca-Cola (NYSE: KO) announced it would raise its quarterly dividend from $0.485 per share to $0.51. This marked the 63rd consecutive year that Coca-Cola's board has given the green light to increase the company's payout. Selling a basic-need good and having virtually unparalleled geographic diversity has led to highly predictable cash flow and sustainable dividend growth. In less than two months, it should be a similar story for healthcare conglomerate Johnson & Johnson (NYSE: JNJ), which has increased its base annual dividend for 62 straight years. I expect it to do so again. Johnson & Johnson is one of only two public companies to sport the highest possible credit rating (AAA) from Standard & Poor's, and has benefited immensely from its shift to higher-margin novel-drug development. An even rarer group of dividend payers than the Dividend Kings are those companies that have made consecutive payouts for more than 100 years. Just over a dozen public companies have paid a continuous dividend for over a century. Coca-Cola is part of this group, with dividend payments made for 105 consecutive years (and counting). Other well-known brands that belong to this exclusive club are integrated oil and gas giant ExxonMobil (NYSE: XOM) and power tools company Stanley Black & Decker (NYSE: SWK). ExxonMobil has paid a consecutive dividend since 1882, while Stanley Black & Decker has doled out a dividend annually since 1876. Stanley Black & Decker is also a Dividend King, with payouts growing in each of the past 57 years. Yet among these time-tested income stocks is a little-known small-cap company that just extended its history-making dividend streak. Raise your hand if you've heard of York Water (NASDAQ: YORW) before. It's a water and wastewater utility valued at just $483 million that services 56 municipalities spanning four counties in South-Central Pennsylvania. It's also a company that sees average trading volume of only 63,900 shares per day (about $2.1 million in value changing hands). I'd be willing to wager that 99.9% of investors have never heard about York Water prior to reading this -- yet it's the greatest dividend stock on Wall Street. On Jan. 27, York's board of directors declared a quarterly dividend of $0.2192 per share, with a record date of Feb. 28 and a payable date of April 15. This payout marks the 209th consecutive year that York Water will dish out a dividend to its shareholders, which is 60 years longer than the next-closest company (Stanley Black & Decker), in terms of consecutive dividend payments. How is it possible that York Water has paid an uninterrupted dividend since 1816? For starters, there's the advantage of cash-flow predictability. Demand for water and wastewater services doesn't change much from one year to the next. To build on this point, most utilities (water, gas, and electric) operate as monopolies or duopolies in the areas they service. Due to the high cost associated with getting infrastructure in place, residential and enterprise customers don't have the option of shopping around for other utility providers. In other words, York Water doesn't have to worry about other utilities siphoning away its customers, which adds to the predictability of its operating cash flow. York Water is also a regulated water utility. Regulated utilities require permission from state commissions before they can increase rates. Though this might sound like a nuisance, it's an important aspect of York's operating model. Being overseen by the Pennsylvania Public Utility Commission ensures that it won't be exposed to potentially unpredictable pricing. Another catalyst that explains York's more than two centuries of success is the willingness of its management team to make bolt-on acquisitions. These acquisitions increase the company's customer base and expand its operating cash flow, which allows for increased organic investment and additional bolt-on acquisitions. Some investors are bound to scoff at York Water's rather pedestrian dividend yield of 2.6%, as of the closing bell on Feb. 25. But keep in mind that yield is a function of payout relative to share price. York has increased its payout for 28 consecutive years (atop its 209-year consecutive dividend streak) and seen its share price rise by nearly 500% since this century began. If not for an almost sextupling in its stock over 25 years, York's yield would be substantially higher. Inclusive of dividends, York stock has returned 1,060% for shareholders since this century kicked off. It's what makes York Water Wall Street's greatest, yet virtually unknown, dividend stock. Ever feel like you missed the boat in buying the most successful stocks? Then you'll want to hear this. On rare occasions, our expert team of analysts issues a 'Double Down' stock recommendation for companies that they think are about to pop. If you're worried you've already missed your chance to invest, now is the best time to buy before it's too late. And the numbers speak for themselves: Nvidia: if you invested $1,000 when we doubled down in 2009, you'd have $340,411!* Apple: if you invested $1,000 when we doubled down in 2008, you'd have $45,570!* Netflix: if you invested $1,000 when we doubled down in 2004, you'd have $533,931!* Right now, we're issuing 'Double Down' alerts for three incredible companies, and there may not be another chance like this anytime soon.*Stock Advisor returns as of February 24, 2025 Sean Williams has no position in any of the stocks mentioned. The Motley Fool recommends Johnson & Johnson. The Motley Fool has a disclosure policy. Wall Street's Greatest Dividend Stock Just Made History Again -- and 99.9% of Investors Have Never Heard of This Small-Cap Company was originally published by The Motley Fool
Globe and Mail
13-02-2025
- Business
- Globe and Mail
3 Brand-Name, Ultra-High-Yield Dividend Stocks Patient Investors Can Confidently Buy With $300 Right Now
With thousands of publicly traded companies and exchange-traded funds (ETFs) to choose from, Wall Street offers no shortage of ways for investors to grow their wealth. But among this vast sea of pathways to become richer is one of the most-successful strategies: buying and holding high-quality dividend stocks. Companies that pay a regular dividend often share a few traits: They're usually profitable on a recurring basis. They're often capable of providing transparent long-term growth outlooks. They've demonstrated to Wall Street they can successfully navigate their way through recessions. More importantly, dividend stocks have a knack for outperforming. In The Power of Dividends: Past, Present, and Future, researchers at Hartford Funds, in collaboration with Ned Davis Research, found that dividend stocks averaged an annualized return of 9.17% from 1973 through 2023, and did so while being 6% less volatile than the broad-based S&P 500. Meanwhile, the non-payers delivered a more modest annualized return of 4.27% over the same half century, and were 18% more volatile than the benchmark S&P 500. Ideally, investors want the highest yield possible with the least amount of risk. The issue is that risk and yield tend to correlate, which means a lot of vetting is necessary on the part of investors to avoid getting stuck in a yield trap. The good news is there are three exceptionally well-known, ultra-high-yield dividend stocks -- sporting an average yield of 6.65% -- which can be bought with confidence right now by patient investors with $300. Pfizer: 6.74% yield The first brand-name stock that long-term income seekers can set and forget in their portfolios is pharmaceutical goliath Pfizer (NYSE: PFE), whose 6.74% yield is nearing an all-time high. Although Pfizer's stock chart gives the perception that it's struggling, a deeper dive into the company's operating performance shows it's been a victim of its own success. After generating in excess of $56 billion in sales from its COVID-19 therapies in 2022, Pfizer's combined COVID-19 drug sales fell to a little over $11 billion in 2024. But taking a wider-lens approach completely changes the perspective of this data. Although COVID-19 sales declined by around $45 billion over the last two years, any revenue generated from Pfizer's COVID-19 vaccine (Comirnaty) and oral therapy (Paxlovid) compares quite favorably with the $0 it was generating from this segment four years ago. Between 2020 and 2024, Pfizer's net sales soared 52% to $63.6 billion. That's not a struggling business. Something else exciting is Pfizer's $43 billion acquisition of cancer-drug developer Seagen in December 2023. This deal vastly expands Pfizer's oncology pipeline and provides an immediate boost to its sales. It'll also result in significant cost savings, which are reflected in its 2025 profit forecast. Pfizer benefits from healthcare being a highly defensive industry, as well. Since we don't get to choose when we become ill or what ailment(s) we develop, the company's operating cash flow tends to be predictable and consistent. This makes its forward price-to-earnings (P/E) ratio of 8 quite the bargain. Verizon Communications: 6.69% yield A second brand-name stock that can be confidently scooped up with $300 by opportunistic long-term investors is telecom stalwart Verizon Communications (NYSE: VZ). Verizon's nearly 6.7% yield is also approaching an all-time high. If there's a knock against Verizon, it's that it's not an artificial intelligence (AI) stock. Investors are gravitating to high-growth, high-volatility tech stocks, and not mature businesses like Verizon that generate low-single-digit sales growth and highly predictable cash flow. But investor apathy toward this telecom giant can be income seekers' gain. The beauty of wireless services and the internet is that both are viewed as basic necessities. During periods of economic turbulence, consumers are unlikely to cancel their access to the outside world. Wireless retail postpaid churn rate was only 1.12% during the fourth quarter, with average revenue per account climbing by 4.2% from the prior-year period. Consumers are sticking around, with the 5G revolution incenting a steady upgrade to wireless devices. Though Verizon's growth heyday ended long ago, you wouldn't know it by homing in on the company's broadband operations. Total broadband connections grew to more than 12.3 million in 2024 (a 15% year-over-year increase), which has the potential to boost its operating cash flow. Best of all, broadband subscribers are more likely to bundle their services, which can improve customer loyalty and, ultimately, Verizon's operating margin. The final thing to note about Verizon is that its financial flexibility is improving. Over the last two years, its total unsecured debt has declined by almost 10% to $117.9 billion. When coupled with a forward P/E ratio of around 8, Verizon stands out as an amazing deal. Ford Motor Company: 6.51% yield The third brand-name, ultra-high-yield dividend stock that patient investors can purchase with $300 right now is legacy automaker Ford Motor Company (NYSE: F). Excluding the COVID-19 crash in the first quarter of 2020, Ford's yield hasn't regularly parked above 6% since 2019. Ford's yield topping 6% is a reflection of its stock touching a greater-than-four-year low this week. Steep losses from its electric vehicle (EV)-focused Model e segment in 2024, along with uncertainties that caused management to forecast a tough year in 2025 -- Ford's EBIT (earnings before interest and taxes) forecast of $7 billion to $8.5 billion for 2025 missed the mark -- led to a breakdown. Despite the cyclical nature of legacy automakers, there are a handful of long-term catalysts investors can focus on. For example, Ford does have the luxury of adjusting its spending spigot to match consumer demand. Being mindful of tepid EV demand allows management to pare back spending and shift it to legacy segments that are generating healthy profits. Ford's shareholders can also take solace in knowing the company is making strides to improve its production quality. While higher-than-anticipated warranty expenses have weighed on the company's profits in recent years, many of these issues can be traced to before Jim Farley became CEO in October 2020. In 2024, J.D. Power's "Initial Quality Study" put Ford in the top third of all brands examined in terms of fewest problems per 100 vehicles. To round things out, Ford F-Series pickup has been the best-selling truck in the U.S. for the last 48 years, and the top-selling vehicle domestically (period!) over the last 43 years. While bigger isn't always better in the business world, trucks are statistically better than sedans at generating juicier vehicle margins for automakers. As long as Ford can maintain the popularity of its F-Series truck line, its forward P/E ratio of roughly 5.4 is a steal. Should you invest $1,000 in Pfizer right now? Before you buy stock in Pfizer, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Pfizer wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*. Learn more » *Stock Advisor returns as of February 7, 2025
Yahoo
04-02-2025
- Business
- Yahoo
2 Ultra-High-Yield Dividend Stocks That Are No-Brainer Buys in February
For more than a century, the stock market has stood tall over all other asset classes. While buying and holding bonds, gold, oil, or real estate, would have increased your wealth, no asset class has come close to rivaling the average annual return of stocks over extended periods. Though there's no shortage of ways to make money on Wall Street, one time-tested strategy that's difficult to beat is purchasing and holding high-quality dividend stocks. Companies that pay a regular dividend to their shareholders are typically profitable on a recurring basis and capable of providing transparent long-term growth outlooks. Perhaps most important, dividend stocks have almost always proven to investors that they can successfully navigate periods of economic turbulence. Another great aspect of income stocks is their unmistakable outperformance of non-payers. In The Power of Dividends: Past, Present, and Future, the analysts at Hartford Funds, in collaboration with Ned Davis Research, compared the performance of dividend stocks to non-payers spanning a half-century (1973-2023). What their research showed was that dividend stocks more than doubled the average annual return of public companies that didn't offer a dividend: 9.17% vs. 4.27%. Ideally, investors want to receive the maximum yield possible with the least amount of risk. But studies have found that risk and dividend yield tend to go hand in hand. In other words, ultra-high-yield stocks -- i.e., those with yields four or more times greater than the yield of the S&P 500 -- can sometimes be more trouble than they're worth. But this isn't always the case With proper vetting, amazing deals can be uncovered for companies sporting ultra-high yields. What follows are two ultra-high-yield dividend stocks -- sporting an average yield of 6.15% -- which make for no-brainer buys in February. The first magnificent dividend stock investors can confidently add to their portfolios for the shortest month of the year (and beyond) is pharmaceutical behemoth Pfizer (NYSE: PFE). Pfizer's somewhat steadily growing payout and its declining share price (of late) have pushed its yield to 6.5%, which is a stone's throw from an all-time high. Although the 51% decline in Pfizer's stock over the trailing-three-year period would appear to signal issues with the company's operating model, the reality is that the company has been a victim of its own success. During the COVID-19 pandemic, Pfizer was one of a small number of drugmakers to successfully develop a vaccine (Comirnaty). It also created Paxlovid, which is an oral regimen used by patients to keep them from developing a severe case of the disease. In 2022, Comirnaty and Paxlovid collectively generated more than $56 billion in sales for Pfizer. In 2024, this combo was estimated to generate $10.5 billion in revenue. While it's true that Pfizer's core COVID-19 therapies will see sales decline by more than $45 billion in two years, let's also note the company had $0 in COVID-19 drug sales when this decade began. In fact, the midpoint of Pfizer's 2024 sales guidance ($62.5 billion) is 49% higher than the $41.9 billion in net sales reported in 2020. For all intents and purposes, its brand-name drug portfolio has significantly strengthened over the last four years. Excluding Pfizer's COVID-19 therapies, operating sales (sans currency changes) grew by 14% in the September-ended quarter. Through the first nine months of 2024, operating sales growth in oncology and specialty care rose by 26% and 12%, respectively. One of the more exciting catalysts for Pfizer -- and a key reason oncology revenue has surged by an aforementioned 26% -- is its $43 billion acquisition of cancer-drug developer Seagen, which closed in December 2023. Aside from substantial long-term cost-savings, this deal vastly expands Pfizer's oncology pipeline and should be notably accretive to its earnings per share beginning this year. Pfizer also gets the benefit of being in a highly defensive sector. Regardless of how well or poorly the U.S. and global economy are performing, people will still become ill and require prescription medicines. This leads to steady demand for its therapies and relatively predictable operating cash flow. The icing on the cake for investors is Pfizer's historically cheap valuation. Its forward price-to-earnings (P/E) ratio of 9 represents a 15% discount to its average forward-year earnings multiple over the last five years. The second ultra-high-yield dividend stock that makes for a no-brainer buy in February is Wall Street's leading retail real estate investment trust (REIT), Realty Income (NYSE: O). Since its initial public offering in 1994, Realty Income has increased its dividend 128 times, including for 109 consecutive quarters. Best of all, it doles out its payment on a monthly basis. Similar to Pfizer, Realty Income's stock has struggled amid a historic bull market. Shares of the premier retail REIT have fallen by 21% over the trailing-three-year span. Whereas Pfizer was a victim of its own success, Realty Income's subpar performance can be traced to monetary policy shifts by the Federal Reserve. Investors seek out REITs because of their juicy yields and generally low volatility. But when the nation's central bank kicked off an aggressive rate-hiking cycle in March 2022, it sent short-term Treasury yields soaring. With Treasury bill yields approaching Realty Income's dividend yield, investors chose bonds instead. The good news is that the nation's central bank has, once again, altered its monetary policy stance and is in the midst of a rate-easing cycle. Over time, this should allow ultra-high-yielding REITs, like Realty Income, to stand out. But there's more to this story than just the expectation of declining interest rates. For instance, Realty Income's commercial real estate (CRE) portfolio is well-protected from short-lived recessions and e-commerce pressures. By leasing to brand-name, stand-alone businesses that provide basic need goods and services (e.g., grocery stores, dollar stores, and drug stores), Realty Income ensures that its lessee's pay their rent and renew their leases. To build on this point, Realty Income's proven vetting process and lengthy lease terms have led to occupancy rates that are well above the industry average. Whereas S&P 500 REITs have enjoyed a median occupancy rate of 94.2% since the start of the 21st century, Realty Income's median occupancy rate is 400 basis points higher (98.2%) since the beginning of 2000. A higher occupancy rate leads to steadier (and predictable) funds from operation. Management is also doing a phenomenal job of moving the company into new verticals. Realty Income's January 2024 purchase of Spirit Realty Capital, along with two leasing deals orchestrated in the gaming industry, point to ongoing diversification efforts. The final reason Realty Income is a no-brainer buy is its attractive valuation. Based on Wall Street's consensus, shares of the company are valued at roughly 12.4 times forecast cash flow in 2025, which equates to a 26% discount to its average multiple to cash flow over the trailing-five-year period. Before you buy stock in Pfizer, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Pfizer wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $735,852!* Now, it's worth noting Stock Advisor's total average return is 903% — a market-crushing outperformance compared to 176% for the S&P 500. Don't miss out on the latest top 10 list. Learn more » *Stock Advisor returns as of February 3, 2025 Sean Williams has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Pfizer and Realty Income. The Motley Fool has a disclosure policy. 2 Ultra-High-Yield Dividend Stocks That Are No-Brainer Buys in February was originally published by The Motley Fool
Yahoo
27-01-2025
- Business
- Yahoo
The Most Chosen Consumer Brand on the Planet -- Up 711,600% Since Its IPO -- Is Set to Make History in 2 Weeks
There is no one-size-fits-all blueprint to making money on Wall Street -- and that's a good thing. With thousands of publicly traded companies and north of 3,000 exchange-traded funds (ETFs) to choose from, there's likely to be one or more securities that can help growth your wealth. However, select investment strategies have historically given investors a leg up in the return column. Buying and holding high-quality dividends stocks is a perfect example. It shouldn't come as much of a surprise that public companies paying a regular dividend to their shareholders outperform. These are companies that are almost always recurringly profitable and time-tested. In other words, investors aren't going to sleep at night worrying about whether or not these companies will be on solid ground when they wake up in the morning. What is shocking is the magnitude by which dividend stocks have outperformed nonpayers over the long run. In The Power of Dividends: Past, Present, and Future, Hartford Funds, in collaboration with Ned Davis Research, found that dividend stocks delivered a 9.17% annualized return between 1973 and 2023. In comparison, nonpayers generated a more modest 4.27% annualized return over the same half-century span. But great dividend stocks don't grow on trees. Though well over 1,000 securities (stocks and ETFs) pay their investors a dividend, fewer than five dozen public companies are part of a select group of stocks, known as Dividend Kings, which have increased their base annual payout for at least 50 consecutive years. One of these special stocks, which has increased in value by approximately 1,423,200% since its initial public offering (IPO), is set to add to its history-making dividend streak in just two weeks. There are dividend stocks, and then there's the most-chosen consumer staples brand on the planet, Coca-Cola (NYSE: KO). When Coke debuted as a public company listed on the New York Stock Exchange on Sept. 5, 1919, it priced its shares at $40. Over the span of more than 105 years, its shares have undergone 10 forward stock splits, ranging from 2-for-1 to 4-for-1, as well as a 1-for-1 stock dividend in April 1927. Inclusive of these splits (but not including dividends), Coca-Cola stock has increased in value by approximately 711,606% since its IPO, as of the closing bell on Jan. 22. While these gains are eye-popping, the company's dividend streak is, arguably, even more impressive. In February 2024, just two days after releasing its fourth-quarter and full-year operating results, Coca-Cola's board announced it would raise the company's quarterly payout from $0.46 to $0.485 per share. This marked the 62nd consecutive year that Coke's shareholders had witnessed their base annual payout climb. To put this into context, among the thousands of publicly traded companies, just 54 have raised their base annual payout for at least 50 consecutive years. Among these 54, only eight offer a longer streak of consecutive dividend increases than Coca-Cola. Just over two weeks from today, on Feb. 11, it'll report its fourth-quarter and full-year operating results from 2024. With the company's board clear about its intentions of increasing dividends for shareholders, Coca-Cola is expected (during the week of Feb. 10) to boost its payout for a 63rd straight year. Delivering an expected 63-year dividend-increase streak isn't something that happens by accident. It's a reflection of Coca-Cola's foundational and sustainable competitive advantages. One of these key competitive edges is its geographic diversity. With the exception of Cuba, North Korea, and Russia (the latter has to do with its invasion of Ukraine in 2022), Coca-Cola has operations in every country. This means being able to take advantage of higher growth opportunities in emerging markets that can move the organic growth needle. It also leads to predictable and sustainable operating cash flow in developed countries. Selling a basic need good doesn't hurt, either. Consumers are going to purchase Coke's products no matter how well or poorly the U.S. and global economy are performing. According to Kantar in its annual "Brand Footprint" report, Coca-Cola was the world's most-purchased brand for a 12th consecutive year in 2023. But the true unsung hero for Coca-Cola just might be its marketing team. The ability to connect and engage with its customers across generational gaps is a feat few consumer-facing companies have been able to achieve over long periods. The company's marketing team is leaning on artificial intelligence (AI) solutions and social media to connect with younger audiences, and has relied on well-known brand ambassadors and even its holiday tie-ins to engage mature consumers. Lastly, strong brand recognition (especially when selling consumer staples) almost always leads to meaningful pricing power. The effects of inflation rarely make a dent into Coca-Cola's armor. With these sustainable competitive advantages firmly in place, and the company's payout ratio hovering around 65% for 2025 (based on Wall Street's consensus earnings per share estimates), there's plenty of runway for Coca-Cola's historic dividend-increase streak to continue. Ever feel like you missed the boat in buying the most successful stocks? Then you'll want to hear this. On rare occasions, our expert team of analysts issues a 'Double Down' stock recommendation for companies that they think are about to pop. If you're worried you've already missed your chance to invest, now is the best time to buy before it's too late. And the numbers speak for themselves: Nvidia: if you invested $1,000 when we doubled down in 2009, you'd have $369,816!* Apple: if you invested $1,000 when we doubled down in 2008, you'd have $42,191!* Netflix: if you invested $1,000 when we doubled down in 2004, you'd have $527,206!* Right now, we're issuing 'Double Down' alerts for three incredible companies, and there may not be another chance like this anytime soon.*Stock Advisor returns as of January 21, 2025 Sean Williams has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. The Most Chosen Consumer Brand on the Planet -- Up 711,600% Since Its IPO -- Is Set to Make History in 2 Weeks was originally published by The Motley Fool Sign in to access your portfolio
