Latest news with #dividendincome
Globe and Mail
5 hours ago
- Business
- Globe and Mail
Create a Portfolio of Passive Income: 3 High-Yielding Dividend Stocks That Pay More Than 5%
Dividend income offers a great way to strengthen your overall financial position. It can potentially make you less dependent on the income you earn from a job, maybe even allowing you to work less or retire earlier than planned. Money doesn't buy happiness, but being less dependent on work to fund your lifestyle could be a contributor to a happier, less stressful life. A great way to build up dividend income is to invest in high-yielding dividend stocks that also happen to be lower-risk investments. Pfizer (NYSE: PFE), Realty Income (NYSE: O), and Bank of Nova Scotia (NYSE: BNS) are three attractive investments that you'll want to consider if you want to create a strong portfolio of income-generating stocks. Pfizer If you're looking for a high-yielding stock to hold for the long term, Pfizer is one you'll want to strongly consider. At 7.4%, its yield right now is more than five times what you'd get with the average stock on the S&P 500, which pays about 1.3%. Pfizer's stock is trading down more than 10% this year (as of the end of last week), as it can't seem to catch a break. While its valuation is modest -- it trades at 17 times its trailing earnings -- concerns about healthcare reform and the company's future growth prospects have made investors uneasy about the business and investing in it. But the healthcare company is still doing well and is on track to hit its guidance, which calls for revenue between $61 billion and $64 billion this year (comparable to how it did last year). It is also slashing costs to improve its bottom line. And it has been less than two years since it acquired oncology company Seagen, which may unlock more long-term growth for Pfizer in the future. Last year, the company also obtained approval from regulators for its first gene therapy in the U.S. -- Beqvez, a treatment for a genetic bleeding disorder. There's some uncertainty and risk with Pfizer, but there are opportunities as well. And at such a modest valuation, now can be an excellent time to add it to your portfolio. Pfizer has been a big name in healthcare for decades, and I don't think that's likely to change anytime soon. Realty Income One dividend stock I think all income investors should consider owning is Realty Income. This is a real estate investment trust (REIT) that not only offers a high yield of 5.8%, but it also pays a dividend every month. There's no need to wait around for multiple months, as is the case with other dividend stocks; with Realty Income, you're getting a much more regular stream of cash flow. The REIT has a diverse mix of tenants, which makes it an ideal option for long-term investors. It's diversified across industries and geographies, with more than 1,500 clients across 91 industries. The dividend remains well supported -- the REIT reported funds from operations (FFO) per share of $1.05 during the first three months of the year (versus $0.94 a year ago). That averages out to $0.35 per share per month, which is higher than the rate of its monthly dividend of $0.2685. REITs use FFO to assess how much they can afford to pay in dividends, and with Realty Income's financials looking solid, there aren't any significant risks with its payout. Share prices of Realty Income are up 5% this year, and this can be a great income-generating investment to add to your portfolio for the long haul. Bank of Nova Scotia Rounding out this list of high-yielding dividend stocks is Canada-based Bank of Nova Scotia, also known as Scotiabank. At around 6%, that's a high payout for a top bank stock that is known for long-term stability. It declared its first dividend back in 1833 and has continued making regular payments since then. The bank increased its provision for credit losses in its most recent quarter, in a sign of growing concern about macroeconomic conditions. Scotiabank's net income totaled over $2 billion Canadian dollars for the period ending April 30, which was nearly identical to its bottom line in the prior-year period. There are concerns about how the Canadian economy may perform in the near future due to tariffs, but in the grand scheme of things, that may prove to be a short-term concern for investors who are willing to hang on for years. Scotiabank's impressive track record and resilience over the years should inspire some confidence in the business. The bank stock has increased its dividend by more than 22% in four years and can be an excellent option to hang on to for the long term. Not only can you collect a high yield today, but the dividend income you get from this investment can rise over the years. 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. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $649,102!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $882,344!* Now, it's worth noting Stock Advisor 's total average return is996% — a market-crushing outperformance compared to174%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of June 9, 2025
Globe and Mail
2 days ago
- Business
- Globe and Mail
Here's How Investing $300 Per Month Can Create $50,000 in Annual Dividends
Being able to live off dividend income in your retirement years can be a great goal to aim for. And by investing in the stock market, growing your portfolio, and investing in dividend-paying stocks, that can be possible. But just how does that all work? Below, I'll outline a strategy that can help you build up a strong portfolio balance over time through monthly investments of $300, and then, how that can eventually be transformed into a portfolio that's generating around $50,000 per year in dividends for you. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue » Investing in a growth-focused fund can build up a strong portfolio balance in the long term To achieve the best returns over the long run, you'll likely want to have a position in top growth stocks. While they can be volatile, especially in the short term, over a long period of time, you should benefit from their growth and rising valuations. It can, however, be hard to pick the right growth stocks and determine the right mix of them. In order to get around this, you can simply invest in the Invesco QQQ Trust (NASDAQ: QQQ). The exchange-traded fund (ETF) will give you exposure to the top 100 non-financial stocks on the Nasdaq Stock Exchange. There's no worry about having to change your portfolio composition over the years and determining which stocks to buy and sell. All that is taken care of for you through this ETF, which does the work for you. Over the past decade, the QQQ ETF has easily beaten the S&P 500, and is a great example of why it can be an ideal investment option when pursuing long-term growth. Data by YCharts. Historically, the S&P 500 has averaged an annual total return of close to 10%. It's possible that slower annual returns may be on the horizon, given how strong the market has been in recent years. But for the Invesco QQQ Trust, which has performed much better than the market, a 10% total annual return would be a slowdown, and thus, may be a realistic percentage to use when forecasting its future performance. If you were to invest $300 per month into the fund, and it ended up averaging a 10% annual total return (compounded), then after 35 years, your portfolio balance could climb to a value of over $1.1 million. Once you have a high enough balance, dividend stocks can do the rest With $1.1 million, you would need to put that money into investments that yield a little more than 4.5% to generate dividend income of $50,000 per year. If your balance is not at such a high level, then you would need to target a higher yield for that to be possible, and that can result in taking on a bit too much risk. After building up your portfolio to such a large amount, it'll be important to balance both dividend income along with capital preservation; you don't want all that work of growing your portfolio to go to waste by gambling it on a risky dividend. In 35-plus years, there will be new income-generating investments to consider, but one example today of an ETF that could bring in a lot of income is the iShares International Select Dividend ETF (NYSEMKT: IDV), which yields 5.3% and gives you exposure to international companies from all over the world. This or a similar type of investment could help provide you with a sufficiently high yield to produce $50,000 in annual dividends on a $1.1 million balance, while keeping your risk relatively low. Another thing you can do to try to minimize your risk is to spread your total investment across multiple ETFs. As long as you're averaging around 4.5%, then the end result can still be the same: $50,000 in dividends per year. Investing regularly into stocks is a good move for the long run Regardless of what the outlook may be for the stock market this year, or for the next few years, routinely investing in it can still be an effective way of building up your wealth over the long haul. Timing the market is a risky strategy that can result in you missing out on gains. By simply making it a routine to invest in a fund like the Invesco QQQ Trust each month, you don't need to worry about external factors -- simply trust the process. There may be anxiety and poor returns in any one year, but the long-term trajectory is still likely to be a very strong and positive one. Should you invest $1,000 in Invesco QQQ Trust right now? Before you buy stock in Invesco QQQ Trust, 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 Invesco QQQ Trust wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $669,517!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $868,615!* Now, it's worth noting Stock Advisor 's total average return is792% — a market-crushing outperformance compared to173%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of June 9, 2025 David Jagielski has no position in any of the stocks mentioned. The Motley Fool recommends Nasdaq. The Motley Fool has a disclosure policy.
