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Globe and Mail
2 hours ago
- Business
- Globe and Mail
The Smartest Dividend Stocks to Buy With $100 Right Now
Dividend stocks have historically been wise investments. They've outperformed nondividend payers by more than 2-to-1 over the past 50 years, according to data from Ned Davis Research and Hartford Funds. Companies that grow their dividends have proven to be the smartest investment because they've generated the highest returns (10.2% average). At that rate of return, they can grow a $100 investment into about $15,875 in 50 years. Realty Income (NYSE: O), Invitation Homes (NYSE: INVH), and Rexford Industrial Realty (NYSE: REXR) are standout dividend growth stocks. The real estate investment trusts (REITs) have high dividend yields and excellent growth track records. With relatively low share prices, they're some of the smartest dividend stocks to buy for those with $100 to invest right now. 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 » An amazing growth record Realty Income's share price was recently around $57.50. At that price and its recently raised dividend rate, the diversified REIT yields 5.5%. That's several times higher than the S&P 500 (SNPINDEX: ^GSPC) (less than 1.5%). Few companies have delivered the level of dividend growth that Realty Income has achieved since coming public in 1994. It has raised its monthly dividend payment an impressive 131 times, including for the last 111 straight quarters (and 30 years in a row). The REIT has grown its payout at a 4.2% compound annual rate. That steadily rising dividend has contributed to its robust total return, which has averaged 13.6% since it went public. Realty Income should have no trouble continuing to increase its high-yielding dividend. It has a low dividend payout ratio (less than 75% of its stable cash flow) and one of the 10 best balance sheets in the REIT sector. That gives it ample financial flexibility to continue acquiring income-generating real estate. With a $14 trillion total addressable market opportunity across its target property types, it has plenty of room to continue growing. Cashing in on strong and growing rental demand Invitation Homes' share price was recently below $34. At that price, it has a 3.5% dividend yield at its current payment rate. The REIT has raised its dividend every single year since it went public in 2017, including by 3.6% last year. The landlord has delivered sector-leading same-store net operating income growth since coming public, due to its focus on single-family rental properties in fast-growing metro areas. It has enhanced its overall growth rate by routinely buying more rental properties. Those two growth drivers should continue bolstering the REIT's financial results. Demand for rental properties remains robust due to the high costs of buying a house. Meanwhile, the REIT has a strong financial profile, which should support continued portfolio expansion. It has many ways to grow its portfolio, including buying purpose-built rental properties directly from leading homebuilders (over 1,800 homes currently under contract). Its dual growth drivers should allow it to continue increasing its dividend. The REIT's focused strategy has paid big dividends Rexford Industrial Realty's share price was recently under $37. That gave the industrial REIT a dividend yield of around 4.7%. Rexford has grown its dividend at a robust 16% compound annual rate over the past five years and by 248% overall in the past decade, significantly outpacing the REIT sector average. The company focuses solely on the Southern California industrial market, which benefits from high demand and constrained supply. That drives robust rent growth. Rexford also routinely buys additional properties and invests in redevelopment projects to enhance the appeal of its existing properties. Rexford estimates that a combination of embedded rental increases in its existing portfolio, rent growth as legacy leases expire and reprice to higher market rates, and repositioning and redevelopment projects will boost its NOI by 34% over the next few years. On top of that embedded growth, the REIT has the financial flexibility to continue making value-enhancing acquisitions. These drivers should enable the REIT to continue increasing its dividend. Smart dividend growth stocks Realty Income, Invitation Homes, and Rexford Industrial Realty have terrific records of growing their dividends. The REITs are in a strong position to continue increasing their payouts in the future, thanks to their high-quality portfolios, strong financial profiles, and visible growth prospects. Because of that, they look like some of the smartest dividend stocks to invest $100 into right now. Should you invest $1,000 in Realty Income right now? Before you buy stock in Realty Income, 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 Realty Income 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 $664,089!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $881,731!* Now, it's worth noting Stock Advisor 's total average return is994% — a market-crushing outperformance compared to172%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
CNBC
a day ago
- Business
- CNBC
What it will take for stocks to make a new bear market low
The S & P 500 is less than 3% from its record high set in February, and only a recession could knock it back down, according to Ned Davis Research. "A new low would likely require a recession call," wrote chief macro strategist strategist Joe Kalish. "The economy is not currently in [a] recession and we do not foresee one in the second half of the year." Despite higher tariffs and a brewing conflict in the Middle East, the U.S. economy has remained on solid ground. The Labor Department said earlier this month that 139,000 jobs were added in May , more than expected. Kalish also pointed out that U.S. industrial production is just 0.5% away from reaching an all-time high. The S & P 500 hasn't entered bear market territory, but it came close at the height of the global trade scare. On a closing basis, the benchmark fell as much as 18.9% from its all-time high. .SPX 3M mountain SPX in past 3 months "The failure of the stock market to generate a bear market may be important because the stock market is a leading indicator of the economy," Kalish said. To be sure, some cracks have emerged in the economy . Housing starts fell more than expected in May along with retail sales . On top of that, the conflict between Israel and Iran could dampen investor sentiment if the U.S. intervenes. Elsewhere Friday morning on Wall Street, Wells Fargo upgraded Mondelez to overweight from equal weight. "We view MDLZ as one of the best execution stories in Staples, with potential to deliver superior long-term growth, driven by share gains in developed market, white space opportunities in developing markets, and a proactive M & A strategy," analyst Chris Carey wrote. "While the company is confronting historical inflation in 2025, 1) pricing execution has been strong, 2) inflation looks likely to temper in 2026, and we see a recovery of earnings ahead."
CNBC
3 days ago
- Business
- CNBC
Ownership of stocks by households is near a record. Why that could be a bad thing
Household ownership of the U.S. stock market is near a record, but that could be a worrisome development, according to Ned Davis Research. Individual investors are the largest owner of stocks, having allocated roughly 48% of their assets to equities in the first quarter, analyst London Stockton said in a note. The comeback rally of the last two months could be attributed in part to a strong retail presence in the stock market. However, the current level of households buying in at a time when the S & P 500 is near its record high should concern investors, even if the most immediate trend remains bullish. "In the near term, short-term sentiment had gotten extremely oversold in April and the trend is bullish with many of our models and indicators either bullish or neutral at worst," Stockton wrote. "But along with high valuations, high investor allocation to stocks doesn't leave much room for future buying," Stockton said. "Any change in investor preference could also send the market lower." .SPX YTD mountain S & P 500, year to date That's not the only corner of the market with the potential for selling pressure. Apollo chief economist Torsten Slok noted that record-high foreign ownership of the U.S. equity market, of 18%, could fall in the near future if the trade deficit is eliminated. "Foreigners selling goods to the US receive dollars in return, which are then used to purchase US assets, including US equities," Slok wrote. "If the trade deficit is eliminated, there will be fewer dollars for foreigners to recycle into the S & P 500." On Wednesday, all three major averages were higher ahead of the Federal Reserve's interest rate decision, even as investors continue to wade through trade uncertainty and the rising conflict between Israel and Iran.
Globe and Mail
4 days ago
- Business
- Globe and Mail
Want to Collect $300 in Safe Monthly Dividend Income? Invest $32,850 Into These 3 Ultra-High-Yield Stocks.
With thousands of publicly traded companies and exchange-traded funds (ETFs) to choose from, investors have a myriad of ways to grow their wealth on Wall Street. But among these countless strategies, few have more consistently delivered for investors than buying and holding high-quality dividend stocks. Companies that pay a regular dividend to their shareholders are typically profitable on a recurring basis and time-tested. Most importantly, they bring historical outperformance to the table. 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 » 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 over a 51-year period (1973-2024). What they found was a marked disparity in the return column, with dividend payers delivering an average annual return of 9.2%, compared to an average of 4.31% for non-payers, annually. While we often think of dividend payments as a quarterly event, there's a small group of public companies doling out their payments on a monthly basis. A few of these businesses are head-and-shoulders above their peers when it comes to their ultra-high-yields, as well as the safety of their payouts. If you want to collect $300 in safe monthly dividend income, simply invest $32,850 (split equally, three ways) into the following three ultra-high-yield stocks, which sport an average yield of 10.96%! AGNC Investment: 15.48% yield The first high-octane monthly income stock that's been delivering a double-digit yield, with consistency, for more than a decade to its investors is mortgage real estate investment trust (REIT) AGNC Investment (NASDAQ: AGNC). There's probably not an industry that Wall Street analysts have disliked more this decade than mortgage REITs. Companies like AGNC aim to borrow money at low short-term rates and use this capital to purchase higher-yielding long-term assets, such as mortgage-backed securities (MBSs). Because the industry is so sensitive to changes in interest rates and Federal Reserve monetary policy, the central bank's aggressive rate-hiking cycle from March 2022 to July 2023 weighed heavily on AGNC Investment and its peers. But the tide has decisively turned in favor of mortgage REITs. The Fed is in the midst of a drawn-out rate-easing cycle and it's doing a good job of telegraphing any shifts in monetary policy. AGNC has typically performed its best during rate-easing cycles, which reduce short-term borrowing costs. As long as the Fed remains transparent with its policy, AGNC and its peers will have ample time to make adjustments to their portfolios to maximize profits. Another key catalyst for AGNC Investment is its agency-focused portfolio. An "agency" security is one that's backed by the federal government in the event of default. AGNC closed out March with a $78.9 billion portfolio, $78 billion of which has been put to work in agency MBSs. While this added protection does weigh down the yield AGNC generates on the assets it's purchasing, it also allows the company to lever its portfolio in order to bolster its profit. Lastly, the U.S. Treasury yield curve is no longer inverted. Yield-curve inversions, which involve shorter-dated Treasury bills sporting higher yields than long-dated Treasury bonds, tend to weigh on AGNC's net interest margin. A normalizing yield curve often leads to net interest margin and book value expansion for mortgage REITs. PennantPark Floating Rate Capital: 11.8% Investors don't need to buy a large-cap company to generate safe, supercharged, monthly dividend income. Business development company (BDC) PennantPark Floating Rate Capital (NYSE: PFLT) has a modest $1 billion market cap, but packs a punch with its annual dividend yield approaching 12%. BDCs are a type of business that invest in the debt or equity (common and/or preferred stock) of generally unproven companies, which are known as "middle-market companies." Though PennantPark did close out the March quarter with nearly $240 million in various common and preferred stock held in its portfolio, the $2.1 billion in debt it holds makes it a debt-focused BDC. Focusing on debt comes with an assortment of advantages for PennantPark. First of all, most middle-market companies lack access to a full array of financial services. As a result, the weighted average yield on PennantPark's debt investments stood at a scorching-hot 10.5%, as of the end of March. PennantPark's entire debt securities portfolio is also based on variable rates. When the nation's central bank increased interest rates aggressively in 2022 and 2023 to combat a historically high inflation rate, it sent PennantPark's weighted average yield on debt investments soaring. Even with the Fed in an aforementioned rate-easing cycle, the slow nature of the central bank's actions has allowed PennantPark to grow its loan portfolio and lock in superior yields. Something else investors can appreciate about this relatively unknown monthly high-yielder is the lengths management has gone to protect invested principal. A top-tier vetting process has resulted in only a 2.2% delinquency rate for the company's loan portfolio, at cost. Further, an average investment size of $14.7 million (including common and preferred stock), spread across 159 companies ensures that no single investment is paramount to PennantPark's success or capable of sinking the proverbial ship. Realty Income: 5.6% yield The third ultra-high-yield stock that can help you collect $300 with an initial investment of $32,850, split equally among the trio, is retail REIT Realty Income (NYSE: O). Realty Income's 5.6% yield might appear modest next to AGNC and PennantPark, but neither of the other two companies have raised their monthly payout for 111 consecutive quarters like Realty Income has. This is the premier company among retail REITs. When the first quarter came to a close, its commercial real estate (CRE) portfolio surpassed 15,600 properties, which is on track to produce more than $5 billion in annualized base rent. One of the reasons Realty Income is so special is because more than 90% of the total rent it collects is resilient to recessions and e-commerce pressures. It primarily leases to brand-name, stand-alone businesses that draw consumer traffic in any economic climate. Some prime examples include grocery stores, drug stores, dollar stores, and automotive locations. Leasing to vetted companies that provide basic need goods and services ensures the rent continues to be paid regardless of how the U.S. economy is performing. Additionally, Realty Income sports a quarter century of superior occupancy rates. Whereas the median occupancy rate for S&P 500 REITs is 94.2% since 2000, Realty Income has been 400 basis points better (98.2%) at its historical median occupancy rate since 2000. This is a testament to its long lease terms, the quality of its tenants (and the vetting process), and the company's prudent disposition activity. To round things out, Realty Income is also, arguably, the cheapest of this ultra-high-yield dividend trio. Its forward-year multiple, relative to Wall Street's consensus cash flow estimate for 2026, is just 12.8, which represents a 21% discount to its average multiple to cash flow over the trailing-five-year period. Should you invest $1,000 in AGNC Investment Corp. right now? Before you buy stock in AGNC Investment Corp., 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 AGNC Investment Corp. 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 $660,821!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $886,880!* Now, it's worth noting Stock Advisor 's total average return is791% — 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
Yahoo
5 days ago
- Business
- Yahoo
5 Dividend Stocks to Buy With $2,000 and Hold Forever
Dividend stocks can provide investors with regular payments, making them ideal for those seeking passive income. Companies that consistently pay dividends tend to outperform non-dividend-paying stocks with lower volatility. Because dividend payers tend to have sound, stable businesses, they can be a good source of income and stock price appreciation. 10 stocks we like better than Chubb › Investing in the stock market is an excellent way to build long-term wealth. For investors seeking passive income, dividend stocks are one way to turn your portfolio into a cash-generating machine. Not only that, but companies that pay dividends consistently tend to outperform those that don't. Research by Hartford Funds, in collaboration with Ned Davis Research, shows that dividend-paying companies have historically outperformed their non-dividend counterparts. Over a 50-year period, investors in dividend stocks enjoyed an annual return of approximately 9.2%, more than double the 4.3% return from non-dividend-paying stocks. Companies that consistently grow their dividend perform even better, with annual returns of 10.2% and lower volatility. If you're looking for dividend stocks that have reliably grown their payouts, here are five stocks to consider today. Chubb (NYSE: CB) is a major player in the global insurance market, providing coverage for a range of risks, including property and casualty insurance, life insurance, and reinsurance. The company has a strong history of conservative underwriting and generates revenue from a diverse range of insurance products. Chubb has consistently maintained steady underwriting profits and disciplined cash management. The company has increased its dividend for 32 consecutive years, showcasing its financial stability. It also generates substantial free cash flow to support its dividend payments and stock buybacks. With a 17% payout ratio, Chubb should have no problem supporting and growing its dividend. Cincinnati Financial (NASDAQ: CINF) is another example of a stable insurance business that has proven itself over time. Thanks to its disciplined approach to underwriting insurance policies and effective capital management, the insurer has raised its dividend payout for over 65 consecutive years, making it a member of the exclusive Dividend Kings club. In addition to its strong underwriting practices, Cincinnati's investment portfolio benefits from higher interest rates. It also invests in equities, which can boost returns during expanding bull markets. With a conservative balance sheet, a modest payout ratio, and consistent underwriting profits, Cincinnati Financial is another solid dividend grower stock to buy today. FactSet Research Systems (NYSE: FDS) provides financial data and analytics to institutional clients, generating steady, recurring revenue through its high client retention rates. Its scalable software-as-a-service (SaaS) and data-as-a-service (DaaS) models generate strong margins and free cash flow, powering its consistent dividend raises for over 27 consecutive years. With an expanding global footprint, FactSet continues to reinvest in product innovation while rewarding shareholders. Its subscription model ensures visibility and durability, making it a solid dividend grower to hold for the long haul. Aflac (NYSE: AFL) is a significant player in the supplemental health and life insurance industry, particularly in Japan and the United States. Its conservative management, low payout ratio, and strong excess capital generation have enabled it to increase dividends for over 42 years. Aflac's business thrives on consistent premium income, low volatility, and effective capital allocation, including buybacks. The company emerged from the COVID-19 pandemic stronger, as claims costs have decreased over the past several years, providing the stock with a boost. The company has also gotten a boost from higher interest rates, which have boosted its net investment income and enable it to reinvest cash from lower-yielding assets to higher-yielding ones. S&P Global (NYSE: SPGI) plays a pivotal role in financial markets, with its businesses encompassing credit ratings (S&P Ratings), indexes (S&P Dow Jones Indices), and data and analytics (S&P Global Market Intelligence). Its high-margin, recurring revenue businesses support substantial, growing dividends and robust buybacks. With a history of dividend increases over 53 consecutive years and a wide economic moat, S&P Global compounds earnings while returning capital to shareholders. Its pricing power and global demand for its services make it a durable dividend stock suited for long-term investors. Before you buy stock in Chubb, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Chubb 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 $653,702!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $870,207!* Now, it's worth noting Stock Advisor's total average return is 988% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 9, 2025 Courtney Carlsen has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends FactSet Research Systems and S&P Global. The Motley Fool has a disclosure policy. 5 Dividend Stocks to Buy With $2,000 and Hold Forever was originally published by The Motley Fool
