Dividend income is a great way to improve your financial situation in the short and long term. Additional income increases stability, reduces the number of hours you work today, and makes it easier to potentially retire early.
There are many great high-yield stocks that can help you earn significant dividend income. By investing $15,000 each. real estate income (oh 2.22%), verizon communications (VZ 1.69%)and enbridge (ENB 0.95%), can generate dividends of $3,000 per year. And over time, that income can increase even more. Let's take a look at each stock and its recent dividend yield.
Real estate income: 5.9%
Realty Income is a real estate investment trust (REIT) that holds a variety of real estate properties in its portfolio. For long-term investors, this is very important as it not only increases long-term stability but also means there are many opportunities for growth.
The company has 1,326 customers across 86 industries. And its portfolio totals 272 million square feet, making it one of the largest REITs in the world.
In 2023, the company finished another strong year with sales up 22% to $4.1 billion. Additionally, funds from operations (FFO) per share were $4.07, slightly higher than $4.04 in the same period last year.
FFO per share is effectively used by REITs in place of net income to assess dividend safety, as it provides a better indication of profitability when non-cash items such as depreciation and amortization are excluded. It's what you use.
The company's monthly dividend of $0.2570, totaling $3.08 for the year, is well below its FFO per share, suggesting the dividend is safe.
Realty Income has increased its dividend every year for 29 consecutive years, and its strong numbers suggest this trend will continue for the foreseeable future. If you invest $15,000 in stocks, your portfolio will receive approximately $890 in annual dividends.
Verizon Communications: 6.6%
The communications sector is a great place to earn long-term dividend income. But as interest rates have risen in recent years, investors have been moving away from telecoms and investing more in bonds and other assets.
A major disadvantage of the telecommunications industry is that capital investments can be wasted, especially when borrowing costs are high. But Verizon is one of the top carriers in the country, and its results suggest business is still in good shape.
2023 ended with operating revenue of $134 billion, down 2.1% from the previous year. But some revenue declines may not be all that surprising as consumers grapple with higher costs and look to reduce their bills.
Certainly, there's no need to worry about Verizon's long-term prospects. Free cash flow totaled $18.7 billion last year, up significantly from $14.1 billion the year before.
Since payments are made in cash, free cash flow is an important consideration for dividend investors. Verizon pays out approximately $11 billion in cash dividends each year, and its recent results show that the company has plenty of room to continue paying and increasing its dividend, even in difficult economic times.
In 2023, Verizon will increase its dividend for the 17th consecutive year, making it the longest streak among U.S. carriers. If you invest $15,000 in this stock, you will receive approximately $990 in dividends per year.
Enbridge: 7.6%
The highest yield on this list comes from pipeline company Enbridge. This has long been one of the safest options for dividend investors in the oil and gas industry.
Because we do not drill for oil or gas, Enbridge's business is not dependent on high commodity prices. But its infrastructure is critical to the industry, as it helps transport 30% of the crude oil produced in North America and nearly 20% of the natural gas used in the United States.
The Canadian company had a strong year in 2023, with adjusted profit of C$5.7 billion ($4.2 billion) unchanged from a year earlier. Distributable cash flow, which dividend investors want to keep an eye on, increased by C$300 million to C$11.3 billion. The company is an industry powerhouse and has met its financial goals for 18 consecutive years.
This company is also known for steadily increasing its dividend every year. That streak now stands at 29 years, and thanks to long-term contracts and continued growth, the business has a lot of predictability, which can also be a good dividend strategy.
If you invest $15,000 in this stock, your annual dividend will be $1,140. Combined with the other investments on this list, your total investment is $45,000 and your expected annual dividend income is approximately $3,020.
