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Derf, >> PSX <<
Those refiners have been on a tear. I've have PSX, MPC, VLO on my radar, but all three have spiked and are near term overbought. Marathon (MPC) is up 10 fold since 2020 (!), with PSX and VLO up 4 fold and 6 fold respectively. Fwiw, I decided to not chase them at this point. As I understand it, the refining business has different dynamics than other oil/gas areas, and is less dependent upon the price of oil. Looks like PSX is also moving into renewable energy -
>>> Phillips 66 Announces Major Milestone in Production of Renewable Diesel
Business Wire
Apr 1, 2024
https://finance.yahoo.com/news/phillips-66-announces-major-milestone-203900162.html
HOUSTON, April 01, 2024--(BUSINESS WIRE)--Phillips 66 (NYSE: PSX) today announced a major milestone in its conversion of the San Francisco refinery into the Rodeo Renewable Energy Complex, expanding commercial scale production of renewable diesel.
The Rodeo Renewed project has progressed, with the facility now processing only renewable feedstocks and producing approximately 30,000 barrels per day of renewable diesel. The Rodeo Renewable Energy Complex is on track to increase production rates to more than 800 million gallons per year (50,000 BPD) of renewable fuels by the end of the second quarter, positioning Phillips 66 as a leader in renewable fuels.
"We are proud to announce this significant achievement at our Rodeo facility," said Rich Harbison, Phillips 66 executive vice president of Refining. "The project advances Phillips 66’s long-held strategy to expand our renewable fuels production, lower our carbon footprint, and provide reliable, affordable energy while creating long-term value for our shareholders."
Harbison added, "We’ve had strong execution to-date and are fully focused on finalizing the project in the second quarter."
The Rodeo Renewed project design also provides the capability of producing renewable jet, a key component of sustainable aviation fuel (SAF), expected to start production in the second quarter of 2024.
Phillips 66 made a final investment decision to move forward with the Rodeo Renewed project in 2022, transforming the San Francisco refinery into one of the world’s largest renewable fuels facilities. As a world-class supplier of renewable fuels, the converted facility leverages a premium geographic location, unique processing infrastructure and flexible logistics to significantly reduce lifecycle carbon emissions.
About Phillips 66
Phillips 66 (NYSE: PSX) is a leading diversified and integrated downstream energy provider that manufactures, transports and markets products that drive the global economy. The company’s portfolio includes Midstream, Chemicals, Refining, and Marketing and Specialties businesses. Headquartered in Houston, Phillips 66 has employees around the globe who are committed to safely and reliably providing energy and improving lives while pursuing a lower-carbon future.
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Derf, I updated the I-Box section of this board to show the dividend stocks in descending order, with the highest divs at the top. I usually wouldn't go after much over 5%, but the pipeline stocks (ENB, TRP) and miners (RIO, URA) seem like decent long term buy / holds, and 6-7% or higher is very tempting. But as usual, I only have small positions..
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DUK is a maybe...the others not so much
NEE - >>> 1 Incredibly Cheap Dividend Growth Stock to Buy Now
by Reuben Gregg Brewer
Motley Fool
Mar 30, 2024,
https://finance.yahoo.com/news/1-incredibly-cheap-dividend-growth-100000971.html
NextEra Energy (NYSE: NEE) isn't your typical utility stock because its business contains two very different divisions. One provides a strong foundation, and the other provides rapid growth.
The combination has made NextEra Energy a dividend growth standout in the typically slow-growth utility sector. Here's what you need to know about NextEra and why this dividend growth stock is so attractive right now.
NextEra Energy is historically cheap
NextEra Energy's dividend yield is around 3.3% today. That's a touch below the industry average of 3.5%, using the Vanguard Utilities ETF as a proxy.
But NextEra is usually afforded a premium to its peers (more on this below). That 3.3% dividend yield just happens to be near the company's highest levels over the past decade, suggesting that the stock is on sale.
Adding to the allure, NextEra Energy has increased its dividend annually for 29 consecutive years. So there's a very real commitment to returning value to shareholders via reliable dividend growth.
But that brings up the key metric in this story: NextEra Energy's dividend has grown at an annualized rate of 10% over the past decade. That is why the stock is afforded a premium price since half that rate would be considered very good in the utility sector.
Put simply, NextEra Energy is a dividend growth machine and looks cheap today. But why? Perhaps something has changed.
NextEra is still projecting big dividend growth ahead
The truth is that something material has changed in the utility sector. Interest rates have risen dramatically over the past couple of years, and that will make it more expensive for utilities to operate their businesses.
Don't get too caught up in that -- NextEra Energy is projecting 10% dividend growth through at least 2026. There are some important facts to know here.
First, NextEra Energy is two businesses in one. The core operation -- about 70% of the company -- is its regulated utility operation. This division largely consists of Florida Power & Light, one of the largest utilities in the United States, which has long benefited from net migration to the Sunshine State. More customers mean more revenue, and the customer trends are not likely to change anytime soon.
As for higher costs, regulators are likely to consider rising interest rates when they contemplate NextEra Energy's requests for rate increases and capital-spending approvals. Maybe there'll be a short-term effect, but in the long term, higher rates shouldn't materially alter the dynamics.
The remaining 30% of NextEra Energy's business is its fast-growing renewable-power operation. The contracts it signs here are market-based, so they, too, will adjust along with interest rates.
But the real story is growth, with NextEra Energy hoping to roughly double its energy capacity in this division by 2026. In other words, more growth is the expected outcome, and that should further support the strong dividend growth that management is projecting.
The big picture is that, despite rising interest rates, NextEra Energy doesn't see much changing in its long-term prospects. That's opening up an opportunity for dividend growth investors to buy this dividend growth gem while it appears to be on the sale rack.
A unique buying opportunity
NextEra Energy isn't going to be for every investor. If you're seeking high-yield stocks, for example, you should probably keep looking.
But if you're a dividend growth investor or even a growth and income investor, NextEra Energy looks like a very attractive option today. It's not your typical utility, for sure -- but that's exactly why you should find the company and its 10% dividend growth rate so alluring.
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>>> Innovative Industrial Properties (NYSE: IIPR) is something of a unicorn in the world of marijuana stocks because it doesn't actually grow and sell pot. Instead, the company operates as a real estate investment trust (REIT).
https://finance.yahoo.com/news/bull-market-2-spectacular-growth-125000070.html
Innovative Industrial Properties acquires cultivation facilities, distribution centers, and other related real estate from state-licensed cannabis operators. It then rents these facilities back to the operators via long-term arrangements.
This model provides recurring rental income for Innovative Industrial Properties and offers more efficiency for the operators by letting them focus on the business of growing and selling marijuana.
It's important to note that the REIT only rents to operators in the medical cannabis business, which is more regulated and enjoys much broader legalization nationwide than the recreational use market. At the time of this writing, about 90% of Innovative Industrial Properties' portfolio was rented out to multi-state operators (MSOs), and around 60% of its tenants are publicly traded companies.
In 2023, the company reported revenue of $310 million and net income of $164 million. Those two figures rose 12% and 5%, respectively, from 2022. Adjusted funds from operations -- an important measure of REIT performance -- for the year totaled $257 million, up 10% from the prior year.
As of the end of the year, the REIT had 108 properties in 19 states. Currently, 95.8% of its operating portfolio is rented via triple net leases, where the tenant pays most of the costs associated with maintaining the property in addition to rent.
Another stellar figure is the rental collection rate, which stood at 100% as of February. The company also has a superior yield and track record of raising its dividend over time. Its current yield of 7% is considerably higher than the average stock trading on the S&P 500 (1.3%), and its dividend has risen 300% over the trailing-five-year period.
The cannabis market can be a risky place to put cash, at least until there is some measure of uniform legislation on a federal level. That said, the medical cannabis niche represents a vast and growing addressable market.
Innovative Industrial Properties operates an unusual model within this industry that lends itself to steady, recurring returns for the business and its shareholders. Investors might want to consider getting a slice of the action.
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>>> 3 Types of REITs That Have Outperformed the S&P 500
by Matt DiLallo
Motley Fool
March 30, 2024
https://finance.yahoo.com/news/3-types-reits-outperformed-p-091300103.html
Congress created real estate investment trusts (REITs) in 1960 to level the playing field. REITs empower anyone to invest in wealth-creating, income-producing real estate.
They've certainly done that over the years. Over the long term, our research found that REITs have outperformed stocks. Since 1994, three REIT subgroups stood out for their ability to beat the S&P 500. Here's a closer look at these market-beating REIT types.
Storing up wealth
According to data from Nareit, self-storage REITs have delivered a 17.3% average annual total return since 1994. That has obliterated the S&P 500's 10.1% average annual total return during that period.
Self-storage REITs have routinely delivered strong returns compared to other REITs:
As that slide highlights, the group has delivered the No. 1 cumulative-sector return since 1999. The space has delivered strong returns over the past decade:
Extra Space Storage (NYSE: EXR) has led the way. As of the final day of 2023, it was the second-best performing REIT over the past decade, with a 443% total return.
A few factors have driven the sector's strong returns. Self-storage properties are very profitable, requiring an occupancy level of 40% to 45% to break even (compared to 60% for most multifamily properties). Meanwhile, demand is steadily rising and relatively economically resilient. On top of that, self-storage leases are short term, which enables operators to increase rents to market rates reasonably quickly. These catalysts have enabled the top-three remaining publicly traded self-storage REITs to grow their core funds from operations (FFO) per share by more than 200% apiece since 2011, with Extra Space growing by nearly 690%. That has enabled all three to deliver robust dividend growth. The rapidly rising dividend income and earnings have enabled these REITs to handily beat the S&P 500.
Dual catalysts
Industrial REITs have delivered the second-best performance in the sector since 1994, with an average annual total return of 14.4%. They have also delivered strong performance over the past decade, with Rexford Industrial and Prologis (NYSE: PLD) delivering two of the five highest returns among REITs at 440.8% and 379%, respectively, as of the end of last year.
Two factors have helped drive the performance of industrial REITs: The accelerating adoption of e-commerce and changing supply chain practices. They've enabled industrial REITs focused on logistics properties to deliver strong core FFO and dividend growth. Over the last five years, logistics REITs have grown their core FFO per share by 9% annually (with 12% from industry-leader Prologis) while delivering 10% compound annual dividend growth (and 12% from Prologis).
The sector expects to continue growing rapidly. Rents on existing warehouse properties are skyrocketing due to high demand and low vacancy levels. That's enabling REITs to develop additional properties. These catalysts drive Prologis' view that it can grow its core FFO per share by 9% to 11% annually through 2026. That should also enable the company to continue increasing its dividend at a strong rate. Those two drivers could enable the leading industrial REIT to maintain its market-beating performance.
Capitalizing on the housing shortage
Residential REITs have delivered the third-highest performance among REIT subgroups since 1994 at 12.7% annually. A few factors have helped drive the sector's strong performance. They include relatively economically resilient demand for rental homes (people need a place to live), enabling landlords to steadily increase rents. Housing market imbalances, especially since the Financial Crisis, have also helped drive demand for rental housing.
As an investment, manufactured home communities have stood out. Equity LifeStyle (NYSE: ELS) was the fourth-best performing REIT over the past decade, delivering a nearly 400% total return as of the end of last year. A big driver is the economic resiliency of manufactured-home communities. These landlords can continue raising rents during a recession because the costs of moving a manufactured home to another community are often too prohibitive.
That driver has enabled Equity LifeStyle to grow its same-store net-operating income at a 4.3% annual rate since 1998, faster than the REIT sector average and apartments (both at 3.3%). Add in an ever-expanding portfolio (which also includes RV parks and marinas), and the company has grown its normalized FFO per share at an 8.6% compound annual rate since 2006. That has allowed it to deliver 21% compound annual dividend growth during that period.
REITs can make great investments
REITs have outperformed the S&P 500 over the long term. A big driver has been the robust returns from self-storage, industrial, and residential REITs. The factors that have enabled those REIT subgroups to deliver strong returns remain in place. That's why investors should consider adding one or more of those REIT classes to their portfolio.
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NEE, DUK - >>> 3 Dividend-Paying Energy Stocks to Buy at a Discount
by Reuben Gregg Brewer
Motley Fool
March 29, 2024
https://finance.yahoo.com/news/3-dividend-paying-energy-stocks-082600370.html
The utility sector is generally one of the more boring segments of the broader energy industry, but that doesn't mean it is always uneventful. In fact, rising interest rates have resulted in Wall Street shunning utility stocks. While there are some good reasons for that, it has opened up an opportunity for long-term income investors to buy reliable dividend stocks like NextEra Energy (NYSE: NEE), Duke Energy (NYSE: DUK), and Black Hills Corporation (NYSE: BKH). Here's a look at each of these energy specialists.
A quick primer on an industry downturn
There's no way to hide the fact that utility stocks are in the dumps today. As the chart below clearly shows, the utility sector, using Vanguard Utilities ETF (NYSEMKT: VPU) as a proxy, has been heading lower while the S&P 500 index has been moving higher. What's been going on? The big issue is that interest rates have been on the rise. That poses two problems for utility stocks.
First, other income options, like certificates of deposit (CDs), are more competitive with some stocks, like utilities, that are known for producing income. If you can get a 5% or so yield from a super-safe CD, why take on the risk of owning a similarly yielding stock? The opportunity for dividend growth is one (very good) reason, but sometimes investors are too short-term focused. As a result, money has shifted out of the utility sector.
Second, and probably more important to consider, is that utilities tend to be capital-intensive companies. That means debt is often a key part of the capital structure. Rising interest rates simply make it more expensive to do business. This will probably hurt near-term financial results throughout the sector. It makes some sense that investors are worried about that. However, these are largely regulated businesses. That means that the government has to approve capital spending plans and rate structures, balancing the need for profit against cost and reliability for customers. Higher rates will, eventually, be taken into consideration in that equation. So, over the long term, slow-and-steady growth is still the likely outcome.
In the end, then, the current industry malaise is probably a long-term opportunity for dividend investors.
Three solid options for dividend investors
NextEra Energy is going to be most attractive to dividend growth investors. Although it owns one of the largest regulated utility operations in the United States (Florida Power & Light), about 30% of its business is dedicated to a rapidly expanding renewable power business. That combination has resulted in annual dividend growth of around 10% on average over the past decade. Management currently believes it can increase the dividend at around that same rate through at least 2026.
That's a pretty astounding pace of dividend growth in the utility sector, which explains why NextEra Energy has long been afforded a premium valuation. But thanks to the current industry downturn, the yield is near a 10-year high at about 3.3%. While that's below the 3.5% industry average, it is still a great opportunity for dividend growth investors; the dividend has been raised annually for 29 consecutive years.
Duke Energy is a bit more conventional. While it is also one of the largest utility companies in the United States, it doesn't have a fast-growing clean energy business like NextEra Energy does. In fact, Duke recently agreed to sell the non-regulated clean energy business it did own. Effectively, it is doubling down on regulated assets, which will increasingly require clean energy investments to be made. But making those investments within the regulated framework will provide more consistent returns. The company has increased its dividend annually for 19 consecutive years and the dividend yield is toward the high end its range over the past decade at 4.3%. Note that the yield is notably above the industry average.
The last utility up is tiny Black Hills Corporation, which has a yield of just about 5%. Like the other two utilities here, that's toward the high end of the range over the past decade. Before moving on to the big reason to like Black Hills, it is worth highlighting just how small it is. This utility's market cap is $3.5 billion, which compares to $72 billion for Duke and a whopping $126 billion for NextEra. That's why it is all the more impressive to see that, of the three, Black Hills is the only one that happens to be a Dividend King, with 55 years' worth of annual dividend increases behind it. It is something of a hidden gem in the utility sector. Like Duke, it is a simple regulated utility, but if you appreciate dividend consistency, it wins hands-down.
There are good options in this out-of-favor industry
Wall Street is particularly downbeat on the utility sector today and that is creating long-term opportunity for dividend investors. You just have to be willing to go against the grain and buy when others are selling. However, if you take the time, you'll find that there are a lot of options in the sector, including dividend-growth stocks like NextEra, boring and reliable giants like Duke, and even Dividend Kings like Black Hills. If you like dividends, don't let this utility sell-off pass you buy without at least doing a deep dive into the space.
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Altria Group - >>> Forget Buying a Rental Property: Investing $50,000 in These Ultra-High Dividend Yield Stocks Could Make You $4,500 in Passive Income
by Brett Schafer
Motley Fool
March 24, 2024
https://finance.yahoo.com/news/forget-buying-rental-property-investing-101500391.html
The internet is awash with claims that the secret to financial independence is buying real estate and renting it out as "passive" income. The problem with real estate investing is that it is not as passive as the internet claims. Maintaining a rental property requires work, as landlords must manage tenants, fix damage, and continuously search for occupants.
There are better ways to generate passive income with your savings. Enter dividend stocks. These are stocks that regularly give shareholders cash payments in the form of dividends. And the best part is, it is actually passive income, requiring zero work on your part. All you have to do is click the buy button, hold on to your shares, and, like magic, you have a new income stream.
Forget buying a rental property. With $50,000, you can buy these two stocks and get approximately $4,500 each year in passive income.
1. Altria Group: Price increases and selling minority stakes
Our first stock is Altria Group (NYSE: MO). This is a tobacco stock that sells Marlboro cigarettes (and others) in the United States, which is the largest driver of profits for shareholders. On top of cigarettes, the company owns cigar brands, nicotine pouches, and a vaping business, although they are much smaller than cigarettes today.
Cigarette volumes have been declining in the United States for the last few decades. This is good for society, but bad for a company like Altria. So what are they to do? Raise prices, of course. Altria has been able to raise the price of cigarette packs for many years to counteract volume declines. This has led to consistent growth in operating income and cash flow, which is what fuels its large dividend payout.
Altria Group owns a large stake in Anheuser Busch, the global beer company. It has started to sell off part of this stake in order to fuel share buybacks, which decrease Altria's outstanding shares. Why is this important for dividend investors? If Altria has fewer shares outstanding, it can raise its dividend payout per share while still paying the same nominal dividend each year. If the dividend per share gets raised, your passive income gets raised as well.
As of this writing, Altria stock has a dividend yield of 8.58%. That means if you use $25,000 -- half of the theoretical $50,000 pile -- to buy shares of the stock, the company will pay you $2,145 each year in dividend income. This is a dividend that has grown by 100% in the last 10 years. You can benefit without putting in any work yourself.
2. British American Tobacco: betting on a new generation
The second stock in this pairing is British American Tobacco (NYSE: BTI). Like Altria, it is one of the world's largest tobacco companies, and it has counteracted volume declines for years by consistently raising prices. It owns brands including Camel, Newport, and Lucky Strike and sells products in many countries around the world.
However, unlike Altria, British American Tobacco's non-cigarette business units are a sizable portion of its operations. These "new categories" (as the company calls them) generated $4.2 billion in revenue last year and are growing rather quickly. These are nicotine products, such as nicotine pouches or e-vapor. These brands have collectively turned a profit and should help the company further counteract volume declines with cigarettes.
British American Tobacco's dividend yield is 9.37%, slightly higher than Altria's. A $25,000 investment into shares of the stock will give you an annual dividend income of $2,342.50. With the continued growth of the new categories segment, I would expect the company's dividend per share to grow this decade as well.
Add it all together, and a $50,000 investment into these two nicotine conglomerates can generate approximately $4,500 in passive income in the form of dividends each year for investors. That's at current share prices, of course. These investments require almost zero work to maintain as a shareholder, which contrasts drastically with the work that needs to be done to maintain rental properties.
Real estate can be a great investment for some people. But for those looking to build truly passive income, you might want to look at buying dividend stocks with your hard-earned savings instead.
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>>> Realty Income's Third-Largest Customer Is Closing 1,000 Locations. Should Investors Be Worried?
by Adam Spatacco
Motley Fool
March 19, 2024
https://finance.yahoo.com/news/realty-incomes-third-largest-customer-104500172.html
One of the most lucrative sources of dividend income is real estate investment trusts (REIT). Realty Income (NYSE: O) is a retail REIT that leases space to brick-and-mortar stores.
The company has a generous history of raising its dividend -- certainly a nice characteristic for anyone looking for passive income. However, one of Realty Income's largest customers appears to be in some trouble.
Dollar Tree is Realty Income's third-largest tenant, and the cost-conscious retailer announced last week that it plans to close 1,000 locations. Not only could this spell trouble for Realty Income, but should investors be worried about the sustainability of its dividend?
Let's dig into the full details and assess what's going on.
What's happening at Dollar Tree?
Dollar Tree is a discount retailer known for selling basic items from home goods, school supplies, candy, and more. In addition to its namesake locations, the company also operates a fleet of stores under the Family Dollar moniker.
During its fourth-quarter earnings, management announced that 1,000 stores will be closing. On the surface, this looks like pretty bad news for Realty Income. But as the old adage goes, there are three sides to every story. Before hitting the panic button, let's dig into how this scenario really impacts Realty Income.
How does this impact Realty Income?
As of Dec. 31, Family Dollar and Dollar Tree represented 3.3% of Realty Income's total annualized-contractual rent.
Per Realty Income's investor presentation, the company leases 1,229 locations to Family Dollar and Dollar Tree. While this might seem like a lot, it actually represents less than 10% of the dollar store's total store count. That's right -- Dollar Tree and Family Dollar have more than 16,000 locations combined.
This dynamic should ease some investor panic as it's clear that Realty Income is just a small fraction of Dollar Tree's overall retail footprint.
Should investors be worried?
In addition to the details explored above, there is one more important nuance as it relates to the store closures. Dollar Tree will be conducting these closures over a multiyear period and will wait for the lease terms to expire for all the identified locations.
This means that even if some of Realty Income's locations are at risk of closure, Dollar Tree will at least continue to pay rent until the lease is up. Not only does this provide Realty Income with some level of predictable income, but it also provides the company time to seek new tenants.
Moreover, Realty Income's recent acquisition of Spirit Realty now looks even savvier in retrospect. The deal broadens Realty Income's reach by opening it up to additional end-markets. The new revenue streams from the acquired properties can help mitigate any losses Realty Income potentially experiences as a result of the Dollar Tree closures.
The last important detail to point out is that Realty Income announced yet another monthly-dividend increase. On the same day the Dollar Tree news broke, Realty Income declared its 645th consecutive monthly-dividend raise since the company's inception.
I would not worry if I was a Realty Income investor. Candidly, store closures are an inherent risk of any retail-related investment. With a long-term occupancy rate of 98.2%, Realty Income has proven that it can keep its properties filled.
I see the Dollar Tree news as more of an attention-grabbing headline than an inherent risk to Realty Income's future. With such a long history of dividend raises, I think now is as good a time as ever to scoop up shares in Realty Income for passive income investors.
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MSFT, CNI, CAT - >>> Billionaire Bill Gates Has Over Half of His $42 Billion Portfolio Invested in These 3 Dividend Stocks
by Keith Speights
Motley Fool
March 10, 2024
https://finance.yahoo.com/news/billionaire-bill-gates-over-half-185000568.html
Do billionaires like dividend stocks? Absolutely. Just take a look at the holdings of famous billionaire investors such as Warren Buffett and Ken Griffin. They're loaded with dividend stocks.
Bill Gates stands out as another great example. Although he doesn't manage a public company or hedge fund like Buffett and Griffin do, he's donated a boatload of money to the Bill & Melinda Gates Foundation Trust. And over half of this charitable foundation's $42 billion portfolio is invested in these three dividend stocks.
1. Microsoft
It should come as no surprise that Microsoft (NASDAQ: MSFT) remains Gates' favorite stock. After all, he co-founded the technology company along with Paul Allen and led it for years. Microsoft ranks as the top holding for the Gates Foundation Trust by far, making up 33.98% of its total portfolio at the end of 2023.
Many tech companies don't pay dividends, but Microsoft is an exception. The company initiated a dividend program in 2003. Over the last 10 years, Microsoft has increased its dividend payout by nearly 168%. Its dividend yield, though, is still only 0.74%.
One key reason why the yield is so low is that Microsoft's share price has soared. The stock has been a 10-bagger over the last 10 years and is up almost 60% over the last 12 months.
2. Canadian National Railway
The Gates Foundation isn't just betting on tech stocks such as Microsoft. Canadian National Railway (NYSE: CNI) ranks as its third-largest holding, making up nearly 16.3% of the total portfolio.
Canadian National Railway isn't limited to just Canada. It has 20,000 or so miles of rail that transport products in the middle part of the U.S. as well. The company also offers transportation and logistics services in addition to rail operations.
The transportation company has increased its dividend for 28 consecutive years, most recently boosting its dividend payout by 7% in the first quarter of 2024. Its dividend yield currently stands at 1.94%.
3. Caterpillar
Caterpillar (NYSE: CAT) is the fifth-largest position for the Gates Foundation. It makes up 5.14% of the total portfolio. That brings the combined weight of these three dividend stocks to 55.41%.
The Gates Foundation has owned Caterpillar since the fourth quarter of 2005. However, the last time it added shares of the equipment manufacturer was back in the fourth quarter of 2013. The most recent transaction involving Caterpillar came in 2022 Q1, with the sale of roughly 24% of the foundation's stake in the company.
Caterpillar has generated nice dividend income for the Gates Foundation through the years. The company has paid a dividend every quarter since 1933 and has increased its payout for 29 consecutive years. Its dividend now yields 1.55%.
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'Derf, Yes, they clearly aren't as good as some of the other stocks on the list, but are only 2 of 50 dividend stocks in total. So it's diversified and lots of small positions. Owning 200 stocks also makes it too cumbersome to sell, so it helps enforce a long term buy / hold mindset. Anyway, it's one strategy, but what works for one investor may not for another.
Having large concentrated positions would have its advantages, but I'm not that confident in my stock picking ability. Buffett says to stay in one's 'circle of competency', and for me that means mostly the S+P 500, with the individual stocks there to help keep it interesting :o)
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I don't like either of your last two.
>>> NextEra Energy -- Fossil fuels aren't going away anytime soon, but renewable energy has steadily contributed more to America's electric grid. NextEra Energy (NYSE: NEE) is one of the world's largest green energy producers and the largest electric utility business in the United States. Growth in renewable energy has fostered big investment returns. Since going public, NextEra has beaten the S&P 500.
https://finance.yahoo.com/news/4-supercharged-dividend-stocks-buy-131600987.html
The company is also an excellent dividend growth stock. The payout has increased for 30 years, and investors get a solid 3.7% starting yield.
The best part? Its dividend growth. Management has raised the dividend by an average of 11% annually over the past five years and is guiding for 10% increases through at least this year. That makes NextEra a dividend growth stock you want to snap up whenever the price dips.
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>>> Enbridge -- Oil and gas must move from where they are extracted to refineries and exports. This doesn't happen by itself. Midstream companies like Enbridge (NYSE: ENB) own vast networks of pipelines and storage to make this possible.
https://finance.yahoo.com/news/4-supercharged-dividend-stocks-buy-131600987.html
Enbridge is one of North America's largest energy companies. Its network of pipelines spans thousands of miles from Canada to the Gulf of Mexico. It also operates renewable energy projects and a natural gas utility business.
Enbridge acts like a toll booth, making money on fees when oil and gas flow through its lines. That makes the business less volatile, and the utility business also helps create dependable revenue streams.
Enbridge has raised its dividend for 28 consecutive years, a testament to its business model. Additionally, investors get a high starting yield of 7.4%. The payout ratio is manageable at 81%, so investors can feel reasonably confident in it despite its abnormally high yield.
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Hadn't really thought about SMG as a pot stock.
The problem I have with pot stocks (I'm noticing I have problems with industries), is that the heads of the companies were most likely criminals before it was made legal.
The problem I have with pharmas are, they seem to rarely make money. With that said, I do own several medical related companies
LLY
GSK
ZTS
PFE
MRK
HLN
MDT
OGN
ABT
GILD
then I got talked into SNGX by Jim Cramer.
Derf, >> ABBV vrs AMGN <<
One solution is to just own both :o) Most of these pharma stocks have nice dividends, and they've been doing great, so I have 9 of them -
ABBV
AMGN
COR
JNJ
LLY
MRK
NVO
NVS
ZTS
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Derf, >> SMG <<
I've been tempted by that stock for several years, but it became so linked to the cannabis sector that it follows those stocks closely. As a turnaround I figure it's still very risky, unless it can de-link itself from the cannabis connection, or if that sector somehow comes back to life. Last I checked they were waiting for Congress to change the banking laws so these companies can get regular financing. Both Parties are apparently for it, but it sounded like not much chance of passage until after the election.
Fwiw, I have a Cannabis Sector board, but it's been neglected -
https://investorshub.advfn.com/Cannabis-and-Hemp-Sector-Ideas-27865
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I was just reading a Motley Fool article comparing ABBV to AMGN right now. MF says that at the moment AMGN is the better buy.......well......ummmm...
thats a definite maybe.
ABBV has just gone through a big run up. AMGN has falled off to its support line. Both pay around 3.5% dividend. AMGN definitely has the lower PE at the moment.
I just bought some $SMG. Just broke through resistance. Currently $65.68.
Dropping back below $60 would be a bad thing.
what's is the highest continuous DIV above 8%??
>>> The Best Performing Self-Storage REITs Over The Past Year
Benzinga
by Ethan Roberts
Jan 25, 2024
https://finance.yahoo.com/news/best-performing-self-storage-reits-215814670.html
Of all the real estate investment trust (REIT) subsectors, self-storage is one of the most difficult to classify. According to the National Association of Real Estate Investment Trusts (Nareit), "Self-storage REITs own and manage storage facilities and collect rent from customers. Self-storage REITs rent space to both individuals and businesses."
Self-storage REITs often get classified as specialized REITs, but the specialized category also includes REITs that own timber, farmland, data centers and other types of properties, so it can be confusing. The basic self-storage REITs include:
CubeSmart (NYSE:CUBE), Public Storage (NYSE:PSA), Extra Space Storage Inc. (NYSE:EXR), National Storage Affiliates Trust (NYSE:NSA), U-Haul Holding Co. (NYSE:UHAL), Iron Mountain Inc. (NYSE:IRM) and AmeriCold RealtyTrust Inc. (NYSE:COLD).
But these REITs do not perform equally. Take a look at which storage companies have performed best over the past 52 weeks:
Iron Mountain Inc. is a Portsmouth, New Hampshire-based specialty REIT with a focus on information management and storage, data center infrastructure and asset lifecycle management. Iron Mountain was founded in 1951, became a REIT in 2014 and has more than 225,000 customers worldwide. In recent years, it has shifted most of its focus from paper to data storage.
In June 2023, Iron Mountain raised its quarterly dividend from $0.62 to $0.65. The forward annual dividend of $2.60 presently yields 3.84%.
In November, Iron Mountain acquired Regency Technologies, a provider of IT asset disposition (ITAD) services in the U.S. for $200 million.
Over the past 52 weeks, Iron Mountain has had a total return of 33.32%, far surpassing all the other storage REITs.
CubeSmart is a Malvern, Pennsylvania-based, internally managed self-storage REIT with 1,374 storage facilities across the U.S. It had its initial public offering (IPO) in 2004 under the name, U-Store-It. In 2011, it was rebranded as CubeSmart. Between 2012 and 2022, CubeSmart grew its funds from operations (FFO) per share by 242%. Its same-store occupancy rate was recently 92.1%.
On Dec. 7, CubeSmart announced an increase in its quarterly dividend from $0.49 to $0.51 per share. The dividend has increased by 55% over the past five years. The $2.04 annual dividend presently yields 4.46%.
On Jan. 2, Jefferies analyst Jonathan Petersen upgraded CubeSmart from Hold to Buy and raised the price target from $38 to $53.
Over the past 52 weeks, CubeSmart has had a total return of 10.11%, making it the second-best-performing self-storage REIT.
Public Storage is a Glendale, California-based, self-managed self-storage REIT that is one of the largest brands of self-storage services in the United States. Its portfolio includes 3,028 self-storage facilities with 217 million rentable square feet across 40 states. It has the largest market cap rate of all self-storage facilities with $51.63 billion.
In addition to providing storage units, it also sells packing and moving supplies and provides insurance services. Public Storage was founded in 1972 and became a publicly traded REIT in 1995 when it merged with Storage Equities. It was added to the S&P 500 in 2005. As of the end of the third quarter, its occupancy rate was 92.1%, but occupancy declined 1.2% from the third quarter of 2022.
Public Storage pays a $3 quarterly dividend. Its $12 annual dividend presently yields 4.09%.
Both Goldman Sachs and Truist Securities recently maintained Buy ratings on Public Storage. On Jan. 11, Goldman Sachs analyst Andrew Rosivach raised the price target from $307 to $340, and on Dec. 28, Truist Securities analyst Ki Bin Kim raised the price target from $285 to $315.
Over the past 52 weeks, Public Storage has had a total return of 5.09%, the third largest return among self-storage REITs.
Extra Space Storage Inc. is a Salt Lake City-based self-storage REIT with over 3,500 self-storage properties, comprising 2.5 million units totaling 280 million square feet across 43 states and Washington, D.C. It has a market cap of $32.72 billion.
In July 2023, Extra Space Storage and Life Storage Inc. completed a merger in an all-stock transaction that added 1,200 properties to Extra Space's total portfolio, making it the largest self-storage company in the United States.
On Jan. 11, Goldman Sachs analyst Caitlin Burrows maintained a Buy rating on Extra Space Storage and raised the price target from $149 to $168.
Extra Space Storage pays a quarterly dividend of $1.62. The annual dividend of $6.48 presently yields 4.36%.
Despite being the largest self-storage REIT, over the past 52 weeks Extra Space Storage only returned 2.57%, the fourth-best total among the self-storage REITs.
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You are on the wrong board there bubba.
Why do they let spammers like you in here?
And what the heck is a "trial member"?
NEWS OUT - KINETIC KNIT Quality Otc is using #AI and the #Metaverse to propel businesses into remarkably higher production levels.
Full PR - LATESTNEWSKNIT
Thanks. And you can look through my stock ideas on my board
https://investorshub.advfn.com/Derfs-Grotto-1450
And post that begins with ...Ð...is a stock market viewpoint. The rest are mostly me rambling on thoughts (if you want to add to them). Used to be quite a busy board, but then politics became an issue....until I banned them from discussion, so everyone left.
Yes, I know what you mean about I-Hubbers, they seem to mainly be penny stock addicts. But there are also some sharp people on I-Hub.
Btw, here is the full list of favorite buy / hold stocks (link below). Some of these are obvious, but others less so. A key criteria is that the stock has to have a nice long term chart (trajectory and steadiness), which is the best overall screening tool I've come up with. The reddish highlighted stocks I own, and the blue highlighted ones I'm waiting for a pullback. I got a little carried away with these lists, but I guess OCD will do that to you, lol..
Listed alphabetically -
https://investorshub.advfn.com/Best-Long-Term-Stock-Ideas-25585
By market cap -
https://investorshub.advfn.com/Buy-Hold-Stocks-42434
By sector (with additional stock ideas included) -
https://investorshub.advfn.com/Elite-Stocks-38031
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I will peruse your list at my earliest convenience. Mostly I just wanted to make sure you weren't a bot.
It's been a long time since I've found someone looking for the same types of stocks as me around here.
>> Who the heck are you? <<
Retired, but following stocks and sectors is a hobby, and these boards are mainly to store articles and stock lists. Thanks for any ideas :o)
Here are the current dividend oriented stocks I own (below). With dividends, I mostly just choose good long tern buy / hold stocks, and figure a dividend over 2% is an added bonus -
AbbVie (ABBV) - Research unit from Abbott Labs (282 Bil) ------------------------------------- 3.8% (Healthcare)
Analog Devices (ADI) - Data converter products (88 Bil) ---------------------------------------- 2.0% (Technology)
Automatic Data Processing (ADP) - Business outsourcing solutions (100 Bil) ---------- 2.4% (IT Services)
Coca Cola (KO) - Beverages (244 Bil) (Berkshire) ------------------------------------------------ 3.1% (Consumer)
EastGroup Properties (EGP) - Industrial property REIT, in Sunbelt (8 Bil) ----------------- 2.8% (REIT)
Equinix (EQIX) - Data center REIT (66 Bil) ---------------------------------------------------------- 2.1% (REIT)
McDonalds (MCD) - Fast food restaurants (195 Bil) (Berkshire) ------------------------------ 2.3% (Consumer)
Mondelez Intl (MDLZ) - Food products (was part of Kraft) (Berkshire) (94 Bil) ----------- 2.3% (Consumer)
Pepsico (PEP) - Food and beverage (241 Bil) ------------------------------------------------------- 2.9% (Consumer)
Procter + Gamble (PG) - personal care products (357 Bil) (Berkshire) ---------------------- 2.5% (Consumer)
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Amgen (AMGN) - Biopharma (141 Bil) ---------------------------------------------------------------- 3.0% (Healthcare)
Home Depot (HD) - Home improvement and construction products (304 Bil) --------------- 2.5% (Retail)
Illinois Tool Works (ITW) - Diverse industrial products + equipment (78 Bil) --------------- 2.2% (Industrial)
Merck (MRK) - Pharmaceuticals (287 Bil) ------------------------------------------------------------- 2.6% (Healthcare)
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Who the heck are you?
I'm always looking for real dividend companies. Not sure how I've missed this board.
FAVO Capital Inc. has successfully acquired three notable firms, including Believe Call Center
located in the Dominican Republic. Lendtech CRM Solutions, together with an associated
Independent Sales Firm.
Believe Call Center: Enhancing Customer Engagement and Support Capabilities
The Dominican Republic-based Believe Call Center was acquired by Favo Capital in a calculated attempt to improve customer support and engagement. By entering the Caribbean market, Favo Capital is demonstrating its dedication to offering outstanding customer service to a wide range of clients and enhancing its back-office skills in order to facilitate future growth.
Read more: https://bit.ly/FAVO_NEWS
>>> PepsiCo Is Known for Sodas Such as Pepsi and Mountain Dew. But Almost 50% of Its Profits Comes From Something Else Entirely.
by Jon Quast
The Motley Fool
December 31, 2023
https://finance.yahoo.com/news/pepsico-known-sodas-pepsi-mountain-165723426.html
The granddaddy of the colas is The Coca-Cola Company, with the Coca-Cola brand launching in 1886. The Pepsi-Cola Company, now PepsiCo (NASDAQ: PEP), wasn't far behind with its own Pepsi-Cola drink in 1898. And the two have locked horns for cola supremacy ever since.
Neither Coke nor Pepsi was able to take down its cola competitor. So it wasn't long before these two companies upped the ante by developing comprehensive soda-brand portfolios. Nowadays, PepsiCo sells well-known sodas such as Mountain Dew, Pepsi Wild Cherry, Mug Root Beer, Crush, and Starry in addition to its eponymous Pepsi.
PepsiCo built its portfolio by making several key acquisitions. Its 1964 acquisition of Mountain Dew was especially crucial to its present-day success. In the U.S. carbonated soft-drink market, Mountain Dew had 6.6% market share in 2022, according to Statista. I'd say that buyout worked out quite well.
Pepsi's Mountain Dew acquisition was huge. But a merger the following year was even more significant for the company and its shareholders.
It has nothing to do with carbonated soft drinks. But almost half of Pepsi's profits today are derived from a source that would have shocked the beverage company's founders.
When a beverage company dreamed bigger
In 1965, Pepsi-Cola merged with Frito-Lay -- a snack company with a portfolio that today includes Lay's, Fritos, Doritos, Cheetos, Funyuns, Spitz, Cracker Jack, and more. This was a strong departure for a business formerly focused entirely on carbonated soft drinks. But it was a good move.
Through the first three quarters of 2023, PepsiCo's Frito-Lay North America business segment has generated revenue of $17.4 billion. That's nearly as big as its Beverages North America segment's revenue of $19.7 billion.
In North America, Pepsi's snack revenue nearly matches the revenue from beverages. But these snack foods actually have better profit margins. Frito-Lay's operating income of $4.9 billion is better than operating income of just $2.2 billion for beverages.
Not only is Frito-Lay's operating income higher than beverages, it's also accounted for 48% of PepsiCo's total operating income year to date. In short, if Pepsi hadn't pivoted to snacks nearly 60 years ago, it would be half the company that it is today.
Why it matters for investors
There are so many potential takeaways with an observation like this for PepsiCo. For starters, as one of the largest beverage companies in the world both then and now, Pepsi's growth would have been more limited if it had stayed completely within its core competency. Expanding outside of it into an adjacent market with robust cross-promotion opportunities made a lot of sense.
It's similar to what Hershey is doing now, extending beyond candy and into snack items such as pretzels and popcorn.
More broadly, companies that can expand beyond core competencies often make good investments; this trait is known as optionality. Many companies attempt to branch out and few do it well. But PepsiCo is one of the grand success stories.
PepsiCo's blend of beverage revenue and snack sales has an additional benefit for shareholders: It's a potentially more reliable business because it has greater diversity.
All other things being equal, I would choose PepsiCo stock over a pure-play beverage company because of this stabilizing quality. If headwinds blow in the carbonated soft-drink industry for whatever reason, PepsiCo has another part of the business that can help carry it through the challenges.
That's particularly good news for dividend investors. PepsiCo has raised its dividend for 51 consecutive years, making it a Dividend King. Many investors choose to invest in these companies for their predictable dividend payments. Having a diverse business makes it more likely that PepsiCo won't get knocked off the list by a sudden shock to its business.
And it's all possible because the management team for The Pepsi-Cola Company -- a beverage business -- had the foresight to branch into an entirely different arena when it merged with snacking company Frito-Lay.
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>>> Better Buy: Coca-Cola vs. PepsiCo
Motley Fool
By Stefon Walters
Sep 28, 2023
https://www.fool.com/investing/2023/09/28/better-buy-coca-cola-vs-pepsico/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
KEY POINTS
Coca-Cola's higher margins are a testament to its efficiency and pricing power.
PepsiCo's broad portfolio helps hedge against declining demand in the beverage market.
Both have increased their dividend annually for decades -- making them Dividend Kings.
Investors can't go wrong with either choice, but one stands out as the better long-term option.
When it comes to non-alcoholic beverage companies, there's Coca-Cola (KO) and PepsiCo (PEP) -- and then there's everyone else. In the U.S., the two account for around 71% of the carbonated soft drink market. The dominance of that duopoly makes them attractive investment opportunities.
For investors looking to invest in one of these companies, there's no "wrong" option to go with here. However, each company has its own unique strengths and focus areas. Let's see which offers a more compelling case for investors looking to choose one to add to their portfolio.
Coca-Cola's financials seem to be stronger
Coca-Cola is the market leader in non-alcoholic beverages, but one thing that may surprise people is just how much more revenue PepsiCo brings in. In Q2 2023, Coca-Cola made around $12 billion in revenue, more than $10 billion less than PepsiCo made.
Despite the gap in revenue, both companies are similar in net incomes, which is a testament to Coca-Cola's profit margins.
Higher profit margins are important because they give companies more financial flexibility. Higher margins generally come with more cash flow, which companies use for things like research and development, acquisitions, and paying dividends.
Coca-Cola can operate at higher margins largely because of its focus on beverages, operational efficiency, and the pricing power it has thanks to its strong brands. PepsiCo's margins aren't shabby by any means, but its broader business means it has more complexities to deal with, which can lower efficiency.
There's a difference in portfolio diversification
PepsiCo's revenue gap over Coca-Cola can be attributed to its larger portfolio that includes beverages, snacks, and nutrition products. Coca-Cola's portfolio only consists of beverages. Both have iconic brands, including, but not limited to, the following:
Coca-Cola: Coca-Cola, Sprite, Powerade, Dasani, and Minute Maid.
PepsiCo: Pepsi, Gatorade, Lay's, Doritos, and Aquafina.
PepsiCo's vast portfolio can help provide a cushion during times when beverage sales may lag or consumer preferences shift. Coca-Cola dominates the beverage segment, but PepsiCo's diverse portfolio allows it to take advantage of consumer trends across multiple categories.
A good example would be PepsiCo's introduction of products tailored to health-conscious consumers, among them Naked Juice for vegetable and fruit-based smoothies, whole grain breakfast options, and sugar-free, zero-calorie alternatives to traditional sodas.
Both companies have admirable dividends
Regarding dividends, Coca-Cola leads PepsiCo slightly. At their current share prices, Coca-Cola has a 3.2% yield compared to PepsiCo's 2.8%.
Coca-Cola has increased its dividend annually for 61 straight years while PepsiCo has a 50-year streak, so both are Dividend Kings. However, PepsiCo has been increasing its dividend by larger percentages in recent years. PepsiCo has boosted its payouts by 36% in the past five years compared to Coca-Cola's 18%.
Dividend yields fluctuate with stock price, so you don't want yield to be a determining factor in your investment thesis, but it's important nonetheless. Maybe more important, though, is the sustainability of the dividend.
Neither Coca-Cola nor PepsiCo is in danger of needing to cut their dividends, but it's worth noting how much lower Coca-Cola's 56% dividend payout ratio is than PepsiCo's 81%. Coca-Cola's lower payout ratio gives it more flexibility to reinvest in the business or potentially accelerate its dividend increases.
Which should investors go with?
For long-term investors, the better choice now seems to be Coca-Cola. The stock is more expensive, with a price-to-sales ratio of 5.6 compared to PepsiCo's 2.7, but it has the foundation to be a stable and high-yielding stock for the long haul.
Between its top-tier brand equity, impressive margins, and lucrative dividend, Coca-Cola seems to be the more appealing choice for investors looking for reliability and a shareholder-friendly company. It also passes the Warren Buffett test as it is one of his top holdings.
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>>> Amcor plc (AMCR)
https://finance.yahoo.com/news/11-best-packaging-stocks-buy-202837768.html
Number of Hedge Fund Holders: 22
Amcor plc (NYSE:AMCR) is a multinational packaging company that provides a wide range of packaging solutions and services. The company manufactures flexibles, rigid plastics, specialty cartons, and other packaging products. The company remained committed to its shareholder return in its fiscal Q3 2023, as it returned $745 million to shareholders through dividends and share repurchases. Its revenue for the quarter came in at $3.6 billion, declining by 1.1% from the same period last year.
One of the best packaging stocks, Amcor plc (NYSE:AMCR) has been growing its dividends consistently for the past 39 years. It currently pays a quarterly dividend of $0.1225 per share for a dividend yield of 4.86%, as of July 4.
At the end of March 31, 22 hedge funds in Insider Monkey's database owned stakes in Amcor plc (NYSE:AMCR), worth collectively over $244.5 million. With roughly 15 million shares, Polaris Capital Management is the company's leading stakeholder in Q1.
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>>> Passive Income: 3 Dividend Kings Worth a Look
by Derek Lewis
July 7, 2023
https://finance.yahoo.com/news/passive-income-3-dividend-kings-213400562.html
Investors love dividends, as they provide a passive income stream and help cushion the impact of drawdowns in other positions.
And when seeking income, many investors turn to the Dividend Aristocrats, a group of S&P 500 companies that have upped their dividend payouts for a minimum of 25 consecutive years.
However, a step above is the elite Dividend Kings group, companies that have increased their dividend payouts for a minimum of 50 consecutive years.
Three members of the club – Johnson & Johnson JNJ, PepsiCo PEP, and Sysco SYY – all deserve consideration from those seeing reliable dividend payouts. Let’s take a closer look at each.
Johnson & Johnson
Headquartered in New Jersey, Johnson & Johnson is an American multinational corporation that develops medical devices, pharmaceuticals, and consumer packaged goods. Shares currently yield a solid 2.9% annually paired with a payout ratio sitting sustainably at 44% of earnings.
As we can see below, the company has shown a commitment to increasingly rewarding shareholders.
In addition, shares could entice value-focused investors, with the current 15.2X forward earnings multiple sitting beneath the 16.8X five-year median and the Zacks Medical sector average.
PepsiCo
PepsiCo is an American multinational beverage, food, and snack corporation headquartered in New York. Shares yield 2.7% annually, with the company’s payout growing by an impressive 5.5% over the last five years.
PEP is a consistent earnings outperformer, exceeding earnings and revenue estimates in five consecutive quarters. Just in its latest release, the consumer staples titan delivered a 10% EPS beat and reported revenue 4% above expectations.
As we can see below, the company’s revenue growth is somewhat-seasonal but overall reflects stability.
Sysco Corp.
Sysco markets and distributes a range of food and related products primarily to the food service or food-away-from-home industry. Shares currently yield 2.6% annually, with the payout growing by a solid 7.5% over the last five years.
It’s hard to ignore the company’s growth profile, further reflected by its Style Score of “B” for Growth. Estimates suggest nearly 25% earnings growth in its current fiscal year (FY23) on 12% higher revenues. And in FY24, current projections call for an additional 12% earnings growth paired with a 4% sales climb.
Bottom Line
Targeting dividend-paying stocks is an excellent strategy that investors can deploy.
Dividends soften the blow from drawdowns in other positions, provide more than one way to reap a return from an investment, and allow maximum returns through dividend reinvestment.
And all three stocks above – Johnson & Johnson JNJ, PepsiCo PEP, and Sysco SYY – are Dividend Kings, upping their dividend payouts for a minimum of 50 consecutive years.
For those seeking a reliable income stream, all three deserve serious consideration.
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NextEra Energy (NEE) - >>> With its commitment to sustainability, NextEra Energy (NYSE:NEE) has become one of the world’s most significant wind and solar energy providers. The company offers various services, including electricity generation, transmission, distribution, and storage.
https://finance.yahoo.com/news/3-dividend-paying-utility-stocks-172034663.html
NextEra Energy is also involved in research and development initiatives. Through its continued efforts to provide reliable and affordable renewable energy to customers around the globe, NextEra Energy has become an industry leader in delivering clean energy solutions.
NextEra’s huge portfolio and breadth of operations offer a certain level of stability. Plus, its experience in solar and wind projects gives it the edge over competitors looking to capitalize on the benefits of the Inflation Reduction Act.
Recently, NextEra Energy saw its stock nosedive following its earnings repot. The company’s EBITDA did not meet Wall Street projections in the company’s fourth quarter. Additionally, the head of its Florida Power & Light utility announcing his retirement. This was on top of a press release that had to be put out, to refute claims that the company had broken any campaign finance laws in Florida.
Sentiment perked up somewhat after NextEra declared a quarterly dividend of $0.4675/share, which is 10% higher than the previous payout of $0.4250. Shares are still down almost 10% this year, though.
Altogether, NextEra Energy is one of the largest utility companies in North America, offering offers investors an attractive yield of 2.5%. It also is well-positioned to take advantage of growth opportunities in the future. With its low-risk profile, NextEra Energy is an ideal option for investing in dividend-paying utility stocks.
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>>> Southwest Airlines reinstates dividend, sees strong travel demand
Reuters
December 7, 2022
https://news.yahoo.com/southwest-airlines-reinstates-quarterly-dividend-115829890.html
(Reuters) -Southwest Airlines Co on Wednesday became the first major U.S. airline to reinstate its quarterly dividend, more than two years after suspending it in the wake of the coronavirus pandemic.
U.S. airlines have benefited from pent-up demand for leisure trips and a gradual return of lucrative business travel, helping them post strong quarterly earnings despite worries of an economic slowdown.
"Our fourth-quarter 2022 outlook remains strong, and we have a solid plan for 2023," Chief Executive Officer Bob Jordan said in a statement.
In a regulatory filing ahead of its investor day on Wednesday, Southwest said it was expecting "strong leisure revenue trends" to continue into the first quarter of next year, while business travel was expected to improve.
The carrier also trimmed its fourth-quarter fuel cost forecast by about 5 cents per gallon, compared with its previous estimate.
Southwest declared a third-quarter dividend of 18 cents per share, the same level at which it was prior to the pandemic. The dividend will be paid on Jan. 31.
The airline did not detail any stock buyback plans, which have been fiercely opposed by unions, who have asked U.S. airlines to focus on investing in their workers and fixing operational issues.
As part of the federal COVID-19 relief package, airlines had been prohibited from buying back their shares. The ban, however, expired on Sept. 30.
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Winmark - >>> These 3 Dividend Payers Are Outpacing the S&P 500
Motley Fool
By Collin Brantmeyer
Nov 9, 2022
https://www.fool.com/investing/2022/11/09/these-x-dividend-payers-are-outpacing-the-sp-500-c/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
KEY POINTS
Costco has a history of paying special cash dividends and beating the market.
PepsiCo recently became a Dividend King and has a current yield of 2.5%.
Winmark Corporation is set to pay its third special cash dividend in three years.
In a down year for the market, these three dividend stocks are topping the S&P 500.
It's no secret that investors are disappointed with their returns in 2022, with the S&P 500 down about 20% year to date. For investors looking to beat the market, there's evidence that consistent dividend-paying stocks are likelier to produce higher returns with lower volatility than non-dividend-paying stocks.
Therefore, it may be worth adding these three reliable dividend-paying stocks, which have outperformed the market in 2022, to your portfolio.
1. Costco
Most price-conscious consumers are familiar with Costco (COST -0.45%), the membership-only big-box retailer. Its stock is a favorite among long-term investors for its ability to beat the market and pay dividends consistently. Over the past five years, Costco stock is up 194%, compared to the S&P 500's 47%.
Despite a lackluster 2022 with a negative 14% return, Costco stock is still beating the S&P 500 by about 6%.
On the surface, Costco's quarterly dividend of $0.90, which represents a dividend yield of 0.76%, isn't overly impressive. However, the third-largest retailer in the world is known for paying a special cash dividend about every three years. Its last one came in 2020 at $10 per share.
Costco's balance sheet is also one of the strongest in the retail industry. As of Aug. 31, the company had more than $11 billion in cash and short-term investments, compared to just $6.48 billion in long-term debt. As a result, Costco has a rare negative net debt (cash and short-term investments minus long-term debt), which equates to roughly negative $4.5 billion. By comparison, Costco competitors Target and Walmart have a net debt of approximately $14 billion and $35 billion, respectively.
If Costco stock has a downside, it's unquestionably its valuation. Using the common valuation metric price-to-earnings (P/E) ratio, Costco's P/E ratio is roughly 37, whereas its competitors, Target and Walmart, are 18 and 28, respectively. Still, there's a reason Costco deserves a high valuation: Over the past three, five, and 10-year periods, Costco stock has handily beaten Target, Walmart, and the S&P 500.
Overall, Costco has proven to be one of the safest stocks an investor can own. With an unmatched balance sheet, it should continue paying dividends for years to come.
2. PepsiCo
While PepsiCo's (PEP 0.64%) 4% year-to-date returns wouldn't be impressive in a bull market, the stock is outperforming the overall market by about 25% in 2022. The multinational food, snack, and beverage giant became a Dividend King -- an S&P 500 company that has paid and raised its dividend annually for at least 50 consecutive years -- earlier this year. At that time, it raised its quarterly dividend from $1.075 to $1.15 per common share. The stock's current dividend yield is about 2.5%, considerably higher than the S&P 500's 1.6% dividend yield.
Pepsico is a mature business, and its management focuses on returning cash to its shareholders. In 2022, it will pay cash dividends of $6.2 billion and repurchase $1.5 billion worth of shares, for a combined $7.7 billion.
Beyond PepsiCo's dividend and share repurchases, the company posted revenue of $58.3 billion during the first three quarters of 2022, which represented 7.7% growth year over year. Better yet, the company posted net income of $8.4 billion during that same time period, representing a 33% year-over-year increase from $6.3 billion.
These results show that PepsiCo's snacks and sugary beverages will always be in demand whether the economy is booming or struggling. And as a market leader in the food and beverage industry, PepsiCo stock makes an excellent addition to any investor's portfolio.
3. Winmark Corporation
Winmark Corporation (WINA) is a small-cap stock with a market capitalization just shy of $1 billion. Consumers are likely aware of its franchise-based retail companies that specialize in buying and selling used goods: Music Go Round, Once Upon a Child, Plato's Closet, Play It Again Sports, and Style Encore.
Its stock is essentially flat in 2022, which is still a commendable 20% higher than the S&P 500. Winmark currently pays a quarterly dividend of $0.70 per share, which represents a dividend yield of 1.12%. The company has a history of paying and raising its quarterly dividend each year, dating back to 2010, with the exception of one quarter in 2020 when the COVID lockdowns occurred in the U.S and Canada.
Like Costco, Winmark also has a history of paying special cash dividends. In fact, Winmark is paying $3 per share on Dec. 1, 2022 to all shareholders at the close of business on Nov. 9, 2022. Prior to this-year's special dividend, Winmark last paid a special dividend of $3 per share and $7.50 per share in 2020 and 2021, respectively.
Winmark is incentivized to open more franchises because the company's revenue comes from franchise fees and royalty fees. To open one, a franchisee must pay an initial franchise fee of about $25,000 in the United States and pay 4% to 5% of weekly gross sales.
As a result of Winmark's capital-light business model, the company generated $21.1 million in revenue and $10.3 in net income during its latest quarter. Those figures led to an impressive net profit margin -- net income divided by sales -- of 48%. For comparison, Costco had a net profit margin of 2.5% for its most recent quarterly earnings.
One negative for the otherwise glowing company is Winmark's slow franchise growth. Currently, the company has 1,291 franchises and only opened a net of 22 stores over the past 12 months, representing 1.7% growth. If the company can add more franchises at a faster pace, the stock should continue beating the S&P 500 -- just as it has done for years.
Are these dividend stocks buys?
In uncertain market conditions, dividend stocks can provide some comfort when you see payments hit your portfolio each quarter. Beyond that, if executives know that shareholders expect them to raise the stock's dividend each year, the company may take on less risk.
These three stocks, in particular, have established histories of beating the S&P 500 and should continue doing so -- all while paying you quarterly to hold them in your portfolio.
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>>> 3 Dividend Stocks That Will Thrive in a Low-Carbon Future
Motley Fool
By Daniel Foelber, Scott Levine, and Lee Samaha
Nov 3, 2022
https://www.fool.com/investing/2022/11/03/3-dividend-stocks-thrive-low-carbon-energy-future/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
KEY POINTS
NextEra Energy is finally hitting its stride.
Johnson Controls can help reduce carbon emissions for building owners and operators.
Brookfield Renewable operates a massive portfolio of renewable energy assets.
The energy transition offers immense opportunity for long-term investors.
The energy transition presents economic and environmental opportunities for the public and private sectors. Whether it's lowering emissions for legacy industries and existing processes or implementing new technologies that can support a lower carbon future, there is a heightened focus on sustainable growth and environmental, social, and governance investing.
NextEra Energy
NextEra Energy (NEE 1.17%), Johnson Controls International (JCI 5.74%), and Brookfield Renewable (BEP -0.20%) (BEPC 0.59%) are three quality dividend-paying companies with prospects that are aligned with the energy transition.
Improved profitability is the key for NextEra Energy
Daniel Foelber (NextEra Energy): Last Friday, NextEra Energy reported another excellent quarter. The regulated electric utility posted 13% growth in adjusted earnings per share (EPS) in the third quarter versus a year ago.
The company has two main business units. Florida Power & Light (FPL) is the legacy business that supports more than 12 million folks across Florida. That unit alone made over $1.07 billion in net income for the quarter. Meanwhile, NextEra Energy Resources (NEER) is the company's (mostly) renewable energy arm. It finances and operates utility-scale projects across North America. NEER's profitability has improved over the years. It made $722 million in adjusted earnings for the quarter.
NextEra Energy has grown to become the largest renewable energy operator in North America, mainly by using excess free cash flows from FPL to fund NEER's development. It's worth noting that FPL is also investing in solar to shift its energy mix away from natural gas. But NEER's improved profitability is an excellent sign that the business unit is becoming self-sufficient.
Over time, NEER's profitability should help NextEra Energy pay down debt and fund future dividend raises. Having paid and raised its dividend for 28 consecutive years, NextEra Energy is a Dividend Aristocrat with a proven track record of returning value to shareholders.
NextEra Energy is also a reliable business that is able to accurately forecast performance multiples years into the future. For the full year 2022, it is guiding for adjusted EPS of $2.80 to $2.90. For 2023, it expects adjusted EPS of $2.98 to $3.13 followed by $3.23 to $3.43 in 2024 and $3.45 to $3.70 in adjusted EPS in 2025. It also expects to grow its dividend by 10% per year through at least 2023 and 2024. NextEra Energy remains a well-rounded utility stock with a nice blend of growth and reliable passive income from its 2.3% dividend yield.
Johnson Controls International
Long-term growth prospects are excellent for Johnson Controls
Lee Samaha (Johnson Controls): Around 50% of carbon emissions come from the built environment, including 27% from building operations. Building owners and operators must invest in their properties to meet their net-zero emissions goals. That's the driving force behind the case for buying Johnson Controls stock.
The company has a multiyear opportunity to benefit from a cycle of retrofit investment by building owners. And the global pandemic has created an increased awareness of the need for adequately ventilated, healthy, clean buildings. Throw in the dramatically increased gains in building efficiency from using digital technology to manage structures' operations better, and it's not hard to see why building owners are likely to invest.
This speaks to an opportunity for Johnson Controls to grow sales of its heating, ventilation, air-conditioning, building controls, and fire & security products. Indeed, a quick look at revenue and order trends across its industry in 2022 confirms how vital the industry is now.
That said, Johnson Controls did disappoint investors earlier in the year. It's not that orders and backlog growth aren't firm; it's more the case that management was too optimistic over its ability to overcome supply chain pressures. For example, the company found it challenging to execute on its backlog of higher-margin building controls, given an undersupply of semiconductors.
Still, those supply chain pressures will likely ease, and the company's long-term prospects look good. Throw in a 2.8% dividend yield, and the stock is attractive for income-seeking investors.
Brookfield Renewable Corporation Inc.
A powerful path to pocketing some passive income
Scott Levine (Brookfield Renewable): While some companies dip their toes in low-carbon initiatives, Brookfield Renewable is fully immersed. The business includes more than 6,000 power-generating facilities in its portfolio of assets that represent a variety of renewable energy sources: solar, wind, hydropower, and energy storage.
Located around the globe, these assets account for about 24 gigawatts (GW) of generating capacity. For income investors interested in exposure to companies that will prosper from the growing push toward low-carbon power sources, Brookfield Renewable (with a forward dividend yield of 4.2%) is a worthy consideration.
Management's commitment to rewarding investors is undeniable. Since its start in 2000, Brookfield Renewable has increased its distribution to unitholders at a 6% compound annual rate, from $0.38 per unit in 2000 to $1.28 per unit in 2022.
And it's likely that the distribution will continue powering higher for the foreseeable future. Brookfield Renewable consistently articulates a target of annual distribution growth of 5% to 9%. Skeptics might question whether management's dedication to shareholders is jeopardizing the company's financial well being, but the fact that the company has an investment-grade credit rating of BBB+ from Fitch Ratings should allay those concerns.
Brookfield Renewable has a robust pipeline of projects -- about 62 GW of generating capacity -- to support future growth. From 2021 to 2026 alone, management expects to increase its portfolio by 3% to 5% from those projects in its pipeline, additions that will help the company to grow its funds from operations by about 10% per unit.
But growth isn't solely coming from organic sources. Brookfield recently demonstrated its interest in acquisitions with the announcement that it plans on partnering with Cameco to acquire Westinghouse Electric, a global leader in nuclear services.
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>>> 3 Dividend Stocks That Prove That Slow But Steady Wins the Race
Motley Fool
By Marc Rapport
Jul 22, 2022
https://www.fool.com/investing/2022/07/22/3-reits-that-prove-that-slow-but-steady-wins-the-r/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
KEY POINTS
Mid-America Apartment Communities and Prologis are the biggest property owners of their kinds.
Agree Realty is not as big but has a retail portfolio that is profitable and growing.
Agree Realty, Mid-America Apartment Communities, and Prologis have the past, present, and future to merit investor interest.
It's times like these that try investors' souls, or at least their portfolios. Brutal market conditions brought on by inflation and fears of recession have battered the best-laid plans of even conservative income investors like me.
But that doesn't mean I'm selling off those buy-and-holds that I believe will continue to provide reliable income and return to steady growth in share price, too, as the economy and the market eventually recovers.
My focus also will largely remain on real estate investment trusts (REITs), those pools of income-producing assets that tax law requires to pass at least 90% of their taxable income to shareholders.
Many of these dividend machines have proven the adage that slow but steady wins the race if the finish line means a nice flow of cash that supplements the other eggs in your retirement nest.
Here are three to consider. They're in different industries, and each has been in business since before the turn of the century (remember Y2K? That turn of the century).
They are retail REIT Agree Realty (ADC 0.17%), industrial REIT Prologis (PLD -0.29%), and residential REIT Mid-America Apartment Communities (MAA 0.12%).
The chart below shows that over the past 20 years, not only have these three stocks easily outperformed their peers, as reflected in the CRSP US REIT Index, but to a lesser degree even the broader market represented by the S&P 500.
No flash, but plenty of cash
They're hardly flashy outfits, these three. But two of them are the largest of their kind. Prologis has a portfolio of about a billion square feet of logistics warehouse space around the globe and is adding more with its announced acquisition of Duke Realty in a $26 billion megadeal.
In their recent quarterly earnings conference call, Prologis made it clear it sees continued strong demand for logistics warehouse space despite economic tailwinds turning to headwinds for this sector that grew red-hot during the pandemic.
Then there's Mid-America Apartments, with a portfolio of more than 280 apartment communities and 102,000 units that make it America's largest landlord. MAA's properties are nearly all in the Sunbelt and South, where demand and rents are rising, and this kind of business is particularly good.
Last but not least is Agree Realty. While much smaller than the other two, this owner of more than 1,500 shopping centers in 47 states has held steady through ups and downs, including the pandemic's wrath on retail real estate. While its 31 million square feet is minuscule compared with Prologis, Agree is also on the grow, reporting record quarterly investment in new properties last year and then again in the first quarter of this year.
Agreeable performances all around, with more to come
The market has indeed found Agree agreeable. The company's stock is up about 6% so far this year, while MAA and Prologis are both down a more-typical 27% or so. As for yield, Prologis is at about 2.7%, MAA is at about 3%, and Agree is at about 3.8%.
But long-term performance tells us a different story. Over the past 20 years, MAA would have grown a $10,000 stake to about $172,000, a compound annual growth rate (CAGR) in total return of 15%. For Agree, make that about $141,000 and 14%, and for Prologis, a still very respectable $93,000 or so and nearly 12%.
Each of these REITs provides a nice return and has the portfolio and seasoned management in place to continue proving that slow but steady can indeed be a very rewarding pace in this kind of buy-and-hold race.
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>>> Vanguard High Dividend ETF - >>> Worried About Inflation? 1 Investment Strategy That Warren Buffett Likes
Motley Fool
6-21-22
by Trevor Jennewine
https://www.msn.com/en-us/money/topstocks/worried-about-inflation-1-investment-strategy-that-warren-buffett-likes/ar-AAYF0Vz?cvid=9dcd6ab5b7af4343bb421fa35b8da7ad
In May 2021, Warren Buffett offered advice to investors at Berkshire Hathaway's annual meeting. For context, the stock market was soaring at the time -- the S&P 500 had climbed 48% in the previous 12 months -- fueled by unbridled enthusiasm brought on by stimulus checks, low interest rates, and the reopening of businesses in the wake of the pandemic. But Buffett's words were sobering.
He told his audience that many new investors were essentially gambling. Buffett also expressed his belief that index funds were a better option than individual stocks for the average person. Specifically, he recommended holding an index fund comprised of a diversified group of U.S. equities over a long time horizon.
Of course, the macroeconomic environment looks much different today. Rampant inflation and rising interest rates have caused the S&P 500 to crater, sending the benchmark index into bear market territory. But inflation hit a fresh 40-year high in May, so things may get worse before they get better. The S&P 500 is currently 23% off its high, but there have been six bear markets in the last 50 years, and the index dropped by over 45% on three of those occasions.
Building on Buffett's advice, here is one investment strategy that could help your portfolio weather the current downturn.
A diversified index of dividend stocks
Many dividend stocks outperform the market during downturns, especially those that regularly raise their payouts. The reason for that is simple. Only high-quality businesses generate enough cash to consistently pay shareholders a dividend that increases over time. If you reconcile that idea with Buffett's advice, the Vanguard High Dividend Yield ETF (NYSEMKT: VYM) looks like an attractive investment idea right now.
The Vanguard High Dividend Yield ETF comprises 443 U.S. stocks that span 10 market sectors, though 55% of the fund is allocated to consumer staples, energy, utilities, industrials, and healthcare, all of which tend to outperform in inflationary environments. Another 20% of the fund is invested in the financial sector, which tends to outperform in rising interest rate environments. To that end, the Vanguard High Dividend Yield ETF is currently just 14% off its high, easily outpacing the 23% decline in the broader S&P 500.
Also noteworthy, four of the index fund's top 10 positions are stocks Buffett owns through Berkshire Hathaway. That includes Chevron and Bank of America, which account for 19% of Berkshire's investment portfolio. Better yet, the Vanguard High Dividend Yield ETF bears an expense ratio of just 0.06%, meaning you would pay just $6 on a $10,000 portfolio, and its dividend yield currently sits at 2.72%, meaning a $10,000 portfolio would generate $272 in passive income each year.
As a caveat, while the Vanguard High Dividend Yield ETF has significantly outperformed the broader S&P 500 over the past year, especially when accounting for dividend payments, the S&P 500 typically wins in the long run. For instance, the S&P 500 has generated a total return of 65% over the past five years, while the Vanguard High Dividend Yield ETF has generated a total return of 47%.
However, you can't put a price on peace of mind. If your current portfolio composition has you worried about the impact of runaway inflation, consider starting a position in this index fund. I think Warren Buffett would like the idea.
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Realty Income - >>> 2 Stocks That Cut You a Check Each Month
Motley Fool
By Eric Volkman
Jun 9, 2022
https://www.fool.com/investing/2022/06/09/2-stocks-that-cut-you-a-check-each-month/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
This pair of REITs will line your pockets every few weeks.
For the most part, dividend investing rewards the patient. That's because the standard dividend payment cycle is once per quarter, meaning a mere four times per year.
It is, of course, very nice to be paid more frequently. While there aren't a great many companies that distribute a payout each and every month, they do exist; you just have to know where to look. Here are two real estate investment trusts (REITs) that space out their dividend in terms of only weeks, not quarters: Realty Income (O -1.24%) and Apple Hospitality REIT (APLE -2.69%).
1. Realty Income
Most people, we can safely assume, don't spend much time thinking about companies that pay monthly dividends. But when those thoughts do arise, we can also safely bet that the first name that often comes to mind is Realty Income. The company, which concentrates on retail properties, has been doling out monthly dividends for decades now.
Retail is a good sector to be deeply involved in these days. The pandemic seems to finally, finally be abating (although we should remain cautious about this). As a result, people are conducting normal activities like shopping, going to the movies, and eating in restaurants.
This very much plays to the strength of Realty Income, whose foundational business strategy is to lease to tenants resistant to the retail apocalypse. That means places that offer retail experiences that can't be easily duplicated -- going to the cinema to see a first-run film, for example, or spending a leisurely night with your sweetheart at a cozy restaurant.
Realty Income tends to lease on long-term contracts, and its tenants are typically top operators in their industries. As a result, occupancy is consistently high.
As of the end of March, for example, its occupancy rate was 98.6%. Even in the thick of the pandemic, that figure didn't dip much below 98%, which says something about the durability of that portfolio. It's also telling that the REIT can maintain those numbers with nearly 11,300 properties on its asset list.
That latter number is sure to grow, as Realty Income is an opportunistic and ever-hungry acquirer of new properties. That, combined with the rent raises it usually mandates in its contracts, should keep the growth train running. It should also maintain the buoyancy of that monthly dividend, which at a shade under $0.25 per share currently yields a sprightly 4.4%.
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Coca Cola - >>> 3 Strong Warren Buffett Stocks for a Volatile Market
Motley Fool
By Chuck Saletta, Barbara Eisner Bayer, and Eric Volkman -
Mar 13, 2022
https://www.fool.com/investing/2022/03/13/3-strong-warren-buffett-stocks-volatile-market/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
KEY POINTS
When there's inflation, a company that gets a percentage of lots of purchases makes a ton of sense.
One Buffett pick is a timeless beverage giant that has already shown its ability to hold up well in this crazy market.
If you can't pick from among them, why not buy every Buffett investment by buying a single security?
Businesses that are built to last can be a great way to ride out tough times for stocks.
Warren Buffett is well known as one of the world's all-time great investors. He made his fortune as a value-focused investor -- someone who looks to buy stocks when they're cheap and profit as they recover. As the recent market downtrend reminds us, that's often easier said than done, as falling stocks tend to make it feel like your money is evaporating with every down day.
Still, if Buffett's success shows us anything, it's that a strong company that survives a down market can often come out the other side in a much better spot to deliver solid long-term returns for its shareholders. With that in mind, we asked three successful investors to pick strong Warren Buffett stocks that are worth considering in today's volatile market. They picked Coca-Cola ( KO -0.03% ), Visa ( V -1.03% ), and Berkshire Hathaway ( BRK.A -0.27% )( BRK.B -0.31% ). Read on to find out why and decide for yourself whether those companies deserve a spot in your portfolio.
Volatility goes better with Coke
Barbara Eisner Bayer (Coca-Cola): If anyone knows how to make money in all markets, including volatile ones, it's Buffett, the famous nonagenarian who has an approximate net worth of $114 billion. And one of the Oracle of Omaha's favorite stocks is his oldest stock position, which he started purchasing 34 years ago -- The Coca-Cola Company.
Buffett is so in love with the company that he's known to consume five cans of Coke each day. He even joked to Fortune magazine back in 2015 that his body is made up of "one-quarter Coca-Cola." It's no surprise, then, that Berkshire Hathaway owns about $22 billion worth of its shares, or 10% of the company.
It's great that Buffett is so fond of Coke, but that in and of itself doesn't make it a great buy for a volatile market. So let's look at what does.
First, Coca-Cola's products are consumed worldwide and embrace more than its fizzy namesake drink. Its portfolio of beverages has expanded to include changing and healthier tastes, and according to the company, includes "200 brands and thousands of beverages around the world from soft drinks and waters, to coffee and tea." You've probably heard of many of them: Dasani, Fairlife, Fanta, Fuze Tea, Schweppes, Powerade, Smart Water, and Minute Maid. Because these drinks are worldwide staples, people aren't going to stop drinking them when the stock market goes on a wild ride.
The company has survived extreme volatility in the past. Back in October 2018, during an extremely turbulent period, Coca-Cola was up 2% while the S&P 500 was down 9%. This happened because the company was and continues to be a huge, stable conglomerate with a solid dividend and continuing growth prospects.
While the company struggled during the coronavirus pandemic, it has finally returned to growth. During its recent fourth-quarter 2021 earnings report, Coca-Cola said net revenue had grown 10% year over year and earnings per share (EPS) were up 65% per share. And management sees brighter days ahead: 2022 revenue growth of 7.5% and EPS growth of 9% are numbers investors can get excited about for such a stable company.
But the cherry on top of these reasons why Coca-Cola is a great Buffett stock to own during volatile times is its dividend, which currently offers investors a 3% dividend yield. Coca-Cola is also a Dividend Aristocrat and has been raising its payout for 59 years in a row. If stocks start plummeting, investors will still be earning income from the dividend, which is vital when all you're seeing is red every day in your portfolio.
If Buffett put down his bottle of Coke and spoke directly to you, he might just say that Coca-Cola -- with its stable business, continuing growth prospects, and mighty fine dividend -- may be the perfect stock to survive and even thrive through volatile times.
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PG, KO, AAPL - >>> 3 Best Dividend Stocks for Retirement
Motley Fool
By John Ballard
Mar 12, 2022
https://www.fool.com/investing/2022/03/12/3-best-dividend-stocks-for-retirement/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
KEY POINTS
Procter & Gamble has paid a dividend for 131 years.
Coca-Cola still sees opportunities to grow around the world.
Apple is a Dividend King in the making.
Sleep well at night with these high-quality dividend stocks.
Dividends can play a big role in the returns of stocks over many years. Since 1960, 84% of the returns from the S&P 500 index resulted from the compounding returns of reinvested dividends, according to a study by Hartford Funds.
If I were structuring my investments to produce dependable dividend income for retirement, I would consider adding shares of Procter & Gamble ( PG -0.38% ), Coca-Cola ( KO -0.03% ), and Apple ( AAPL -2.55% ) to my holdings. These companies are highly profitable and provide products people use every day, which goes a long way toward paying out rising dividend payments over time. Here's what makes these companies great investments.
1. Procter & Gamble
Procter & Gamble is one of the best income stocks you can own, simply because of its strong consumer brands and impressive streak of paying dividends to shareholders. P&G has increased its dividend for 65 consecutive years. Perhaps more impressive is that the company has paid annual dividends for 131 years.
Through high-volume sales of recognizable brands like Tide, Mr. Clean, Gillette, and Crest toothpaste, among others, P&G pumps out plenty of profits and free cash flow to fund growing dividends. Through the first half of fiscal 2022, the company has returned $11.9 billion to shareholders through a combination of dividends and share repurchases. That's approximately 3.4% of P&G's current market capitalization (total shares outstanding times stock price).
P&G competes on innovation and product superiority. The company keeps a close relationship with retailers that sell its products, which in turn can inform its product and marketing initiatives. Innovation allows P&G to hold a leading market share position even though it may not be the cheapest product on the shelves against other brands. This drives a high-margin business, where P&G's operating margin has hovered above 20%.
People will always need to do the laundry, clean house, and shave, no matter the state of the economy. The stock currently offers an above-average dividend yield of 2.4%, supported by the company's cash payout ratio of 57% relative to its free cash flow. That gives P&G plenty of wiggle room to keep raising the dividend even if free cash flow growth flattens out temporarily. For these reasons, P&G is a great starter dividend stock to buy today.
2. Coca-Cola
Coca-Cola is more than just Coke. The beverage titan now owns more than 200 brands sold in more than 200 countries. It is the largest nonalcoholic beverage company in the world, and it's another elite dividend stock worth considering. It has the brand power and growth opportunities to continue paying dividends for a long time.
There are billions of people in the world, but only a small percentage of them consume these beverages. "Even if we double the number of drinkers of our beverages over the next decade, there would still be plenty of headroom to grow for many years to come," CEO James Quincey said at the recent Consumer Analyst Group of New York.
The latest results lend credibility to Quincey's statement. Coke finished 2021 with global unit case volume up 8% and non-GAAP revenue up 16%, reflecting a strong rebound from the soft demand during the pandemic. Higher demand lifted its gross margin up one percentage point to 60.3%, driven in part by a shift in sales mix to restaurants, sporting events, concerts, and other away-from-home channels.
The recovery last year shows that Coca-Cola is still a preferred beverage when people are having fun. That's also why Coke's advertising often tries to associate consumption of its beverages with doing fun activities away from home.
The stock currently pays a tasty dividend yield of 2.9%, while only paying out 64% of its annual free cash flow in dividends. All this makes Coca-Cola worth holding for retirement.
3. Apple
While investing in well-entrenched consumer goods companies that pay dividends can be very rewarding, it's also a good idea to think about growth. Keep in mind that the total return, including dividends, of Coke and P&G have trailed the return of the S&P 500 over the last decade. This is why you need to consider adding a dividend growth stock to the mix, like Apple.
The iPhone maker's brand is just as iconic as Coca-Cola and just as established in the mindset of consumers. Over the last three years, its installed base of active devices has climbed from 1.4 billion to over 1.8 billion. Apple's users keep credit cards on file, ready to purchase a subscription or app on their iPads or iPhones. This is driving steady double-digit growth in Apple's services business, which now makes up 16% of total revenue.
Apple's dividend yield is much smaller than Coke or P&G's, but it's growing much faster. Over the last five years, Apple has increased the dividend by 52%, compared to 27% for P&G and 18% for Coca-Cola. Its dividend yield is still relatively low at 0.56%, but Apple generates over $100 billion in annual free cash flow to continue increasing the dividend payout for a long time.
Indeed, Apple's free cash flow might be growing faster than management can dish it out to shareholders. The company paid out only 14% of its free cash flow in dividends last year, so it could double the payout and bring its dividend yield over 1% if it wanted to do so.
Apple is one of the great brands of our time, and investors might wish they had bought and held this stock 30 years from now.
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>>> 2 Unstoppable Real Estate Trends That Could Make You Richer
Motley Fool
By Kody Kester
Apr 6, 2022
https://www.fool.com/investing/2022/04/06/got-1000-2-unstoppable-real-estate-trends-that-cou/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
KEY POINTS
Digital Realty Trust offers a market-beating dividend yield with decent growth prospects.
American Tower can provide investors with a market-topping payout and rapid growth potential.
Neither of the two stocks appear to be excessively valued.
Data centers and telecom towers are two steadily growing industries.
Amid all of the noise that comes from day-to-day price swings of stocks, it's easy for investors to lose focus if they're not careful. But by insisting on investing in the best stocks with reasonable valuations in industries with promising trends, I believe investors will still see the big picture.
Due to the ever-present role that technology plays in the modern economy, tech-oriented real estate investment trusts (REITs) will almost certainly benefit from strong growth in the years ahead. Let's dig into two tech-related real estate trends that could create meaningful wealth for investors as the years progress.
1. Data centers
A data center is a physical location or building that stores and computes data. Businesses, individuals, and governments all rely on data centers for the proper functioning of email, websites, online transactions, and more. As technology evolves and the global economy grows, it isn't hard to imagine that data centers will become more embedded into our lives.
This is precisely why analysts anticipate that the global data center market will nearly triple from $187.4 billion in 2020 to $517.2 billion by 2030. Few stocks will benefit from this unstoppable trend as much as Digital Realty Trust ( DLR 0.84% ). That's because its $42 billion market capitalization and portfolio of more than 285 data centers make it one of the largest data-center REITs in the world.
Digital Realty's leadership in the data center industry explains how its core funds from operations (FFO) per share have compounded at 10% annually since 2005. Despite its massive size, the industry outlook should propel Digital Realty's core FFO per share higher by the mid to upper single digits annually in the foreseeable future.
And due to the stock's 70% dividend payout ratio in 2021, the dividend should grow in line with core FFO per share. That's why I believe Digital Realty has many years of 5% to 6% annual dividend increases left in the tank. Paired with a market-beating 3.3% dividend yield, this is an appealing combination of starting yield and growth potential.
And with the tech sell-off year to date, Digital Realty's stock has plunged 16%. As a result, it is priced at a core-FFO-per-share multiple of just 21.4. That's made this dividend growth stock a smart real estate company to buy right now.
2. Telecom towers
Like data centers, telecom towers are already an important part of the global economy. These structures allow us to perform a variety of activities on our smartphones that we might take for granted, like reading and sending email, surfing the internet, online shopping, and online banking.
Increased mobile data consumption and penetration rates of telecom towers in rural areas are two reasons the global telecom tower market is expected to generate massive growth. Analysts are predicting that the industry will nearly triple from $39.5 billion in 2018 to $114.1 billion by 2026.
With a $120 billion market cap, pandemic-proof American Tower ( AMT 1.43% ) is the largest telecom tower stock in the world. That status has allowed its adjusted funds from operations (AFFO) per share to grow 13.8% annually over the last decade.
And with that encouraging industry forecast, American Tower should continue to grow AFFO per share annually in the high single digits to low double digits over the medium term. Along with its dividend payout ratio of just 54% in 2021, this is probably why the company is confident enough to be targeting 12.5% dividend growth in 2022. Considering American Tower's 2.2% dividend yield, this is an attractive blend of income and growth prospects.
And similar to Digital Realty, the stock has been lumped into the tech sell-off this year. With shares down 10% year to date, American Tower is trading at around $260 per share. For a stock with this quality and growth profile, that makes it a solid buy.
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Pepsico, Iron Mountain - >>> 2 High-Yield Dividend Stocks to Buy Now
Motley Fool
By Manali Bhade
Mar 30, 2022
https://www.fool.com/investing/2022/03/30/2-high-yield-dividend-stocks-to-buy-now/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
KEY POINTS
Snack and beverage giant PepsiCo will soon enter the prestigious Dividend Kings list.
Solid business fundamentals and a robust balance sheet make Iron Mountain attractive.
Regular income streams can make it easier for retail investors to withstand the current market volatility.
The U.S. equity market has seen some rocky times in the past few months. According to the AAII Investor Sentiment Survey, investors think the direction of the stock market in the next six months could be unusually bearish, as it has been for the past 17 weeks.
However, many high-quality dividend stocks have managed to withstand the downward pressure even in such difficult times. These stocks generate regular income and are considered safe havens in times of heightened market volatility.
PepsiCo ( PEP 1.42% ) and Iron Mountain ( IRM 1.48% ) are two dividend stocks that are currently trading at or near their 52-week highs. Here are a few reasons investors might regret not buying these stocks now.
1. PepsiCo
Consumer staples giant PepsiCo is gearing up to become a Dividend King in 2022. In February, this global beverage and snacks company announced a 5% year-over-year hike in its quarterly dividend to just below $1.08 per share, payable on March 31. The company has a dividend yield of 2.63%.
PepsiCo's current dividend payout ratio is 77%, which although not low, is still manageable considering its inflation-proof and low-risk business. The company plans to return $7.7 billion to shareholders in fiscal 2022, made up of $6.2 billion in dividends and $1.5 billion in share repurchases.
NASDAQ: PEP
Pepsico, Inc.
Today's Change
(1.42%) $2.38
Current Price
$169.76
PepsiCo enjoys significant brand power, thanks to the worldwide popularity of Pepsi and other beverages such as Gatorade and Mountain Dew. The company's snacks business includes the chips brands Frito-Lay, Ruffles, and Doritos, and it also has a breakfast food division. Both non-beverage businesses were a solid hit during the pandemic and continue to be big revenue drivers even after the relaxation of social distancing regulations. In fiscal 2021 (ended Dec. 25), the company's revenue was up 12.9% year over year to $25.3 billion.
Like many other companies, PepsiCo has faced rising commodity costs. But it has managed to offset much of this by charging higher prices. In the fourth quarter, the company increased its overall pricing by seven percentage points while sales volume grew by four percentage points. Subsequently, it reported an operating profit of $11.16 billion in fiscal 2021, up 10.7% year over year.
Pepsico is guiding for 6% year-over-year organic revenue growth in fiscal 2022, which is at the higher end of its long-term range. The confidence of the company in its execution capabilities in current challenging times coupled with a solid dividend yield make this soon-to-be Dividend King an attractive bet in 2022
.
2. Iron Mountain
Iron Mountain is a global leader in records storage and information management services (paper storage) that is fast moving toward becoming a prominent digital storage player. The real estate investment trust (REIT) has a solid client base of more than 225,000 customers in 1,450 locations across 63 countries.
The company's operations take up around 95 million square feet of real estate, of which 25 million square feet is self-owned.
Iron Mountain Incorporated (IRM)
Today's Change
(1.48%) $0.82
Current Price
$56.23
Iron Mountain's legacy paper storage business continues to be a cash cow despite ongoing global digitization. The company earns the bulk of its revenue from contracted storage rental fees and can pass along some of the inflationary impacts in the form of increased pricing.
Its records management business has a solid 98% customer retention rate. In fiscal 2021, the company reported a 2.6% year-over-year jump in organic storage-rental revenue, driven by robust pricing and volume trends.
The company is positioning itself as a major data center player and has leased 49 megawatts in fiscal 2021, much higher than its target of 30 megawatts. Iron Mountain has a total data center capacity of more than 600 megawatts and can effectively cross-sell to its broad customer base, which includes around 95% of the Fortune 1000 companies.
The REIT pays a handsome dividend yield of 4.74%, with an adjusted funds from operations (AFFO) payout ratio in the mid-60s range at the end of fiscal 2021, within the company's long-term target. AFFO is a key metric used to assess the profitability of a REIT. Iron Mountain expects its future dividends to rise at the same pace as its AFFO per share.
The REIT also has a strong balance sheet with $2 billion of liquidity and net lease-adjusted leverage at a 5.4 multiple, lower than the 5.9 multiple of the J.P. Morgan ( JPM -0.74% ) REIT Composite. A robust business model coupled with a healthy balance sheet will ensure that dividend payouts are quite safe for several years to come.
Iron Mountain expects its AFFO to be in the range of $1.08 billion to $1.12 billion in fiscal 2022.
IRM PS Ratio (Forward) Chart
IRM PS ratio (forward). Data by YCharts.
The company is currently trading at a forward price-to-sales ratio that is far lower than those of other well-managed and profitable REITs such as American Tower, Innovative Industrial Properties, and Equinix. Buying shares of a highly profitable and high-yield REIT in these inflationary times is one strategy that can potentially pay handsome returns, considering its very reasonable valuation.
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Name | Symbol | % Assets |
---|---|---|
Johnson & Johnson | JNJ | 3.75% |
Procter & Gamble Co | PG | 3.47% |
JPMorgan Chase & Co | JPM | 3.08% |
Verizon Communications Inc | VZ | 2.45% |
Pfizer Inc | PFE | 2.05% |
Walmart Inc | WMT | 2.01% |
AT&T Inc | T | 2.00% |
Comcast Corp Class A | CMCSA | 1.99% |
Merck & Co Inc | MRK | 1.97% |
Intel Corp | INTC | 1.95% |
Name | Symbol | % Assets |
---|---|---|
Qualcomm Inc | QCOM | 4.38% |
BlackRock Inc | BLK | 4.33% |
Texas Instruments Inc | TXN | 4.19% |
United Parcel Service Inc Class B | UPS | 3.98% |
Pfizer Inc | PFE | 3.97% |
PepsiCo Inc | PEP | 3.93% |
3M Co | MMM | 3.90% |
Coca-Cola Co | KO | 3.87% |
Verizon Communications Inc | VZ | 3.84% |
International Business Machines Corp | IBM | 3.69% |
Name | Symbol | % Assets |
---|---|---|
AT&T Inc | T | 9.13% |
Exxon Mobil Corp | XOM | 8.47% |
Johnson & Johnson | JNJ | 6.53% |
Verizon Communications Inc | VZ | 6.47% |
Chevron Corp | CVX | 5.60% |
Pfizer Inc | PFE | 5.55% |
Coca-Cola Co | KO | 4.07% |
PepsiCo Inc | PEP | 3.70% |
Cisco Systems Inc | CSCO | 3.66% |
Merck & Co Inc | MRK | 3.66% |
Name | Symbol | % Assets |
---|---|---|
Apple Inc | AAPL | 6.18% |
Microsoft Corp | MSFT | 5.23% |
Procter & Gamble Co | PG | 3.60% |
PepsiCo Inc | PEP | 2.65% |
JPMorgan Chase & Co | JPM | 2.34% |
Philip Morris International Inc | PM | 2.18% |
Williams Companies Inc | WMB | 2.12% |
Chevron Corp | CVX | 1.96% |
Linde PLC | LIN.L | 1.92% |
Altria Group Inc | MO | 1.87% |
Name | Symbol | % Assets |
---|---|---|
Enbridge Inc | ENB.TO | 8.89% |
Kinder Morgan Inc Class P | KMI | 8.59% |
TC Energy Corp | TRP.TO | 8.48% |
Williams Companies Inc | WMB | 8.00% |
ONEOK Inc | OKE | 6.89% |
Cheniere Energy Inc | LNG | 6.46% |
Targa Resources Corp | TRGP | 4.99% |
Antero Midstream Corp | AM | 4.63% |
Energy Transfer LP | ET | 4.54% |
Equitrans Midstream Corp | ETRN | 4.48% |
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