Even amid wage increases, a recent report by loan club suggests that 61% of Americans lived paycheck to paycheck last year. That’s a high number and further proof that finding ways to diversify and supplement your income is important. A simple way to do this is to use dividend stocks.
As March approaches, three of the best dividend-paying stocks are Walgreens Boot Alliance (WBA 2.05% ), Innovative industrial properties ( IIPR 4.00% )and Unilever (UL 3.04% ). Here’s why now might be the right time to buy these stocks.
1. Walgreens Boots Alliance
Pharmaceutical distributor Walgreens currently pays its shareholders a dividend yield of 4.2%, three times the size of the S&P500 average of 1.3%. Investing $10,000 in Walgreens would generate $420 in annual income (compared to just $130 with the average stock).
And what’s even more promising for long-term investors is the prospect of benefiting from future rate hikes; Walgreens is a dividend aristocrat, and after a 2.1% rate hike last year, its streak of consecutive rate increases stands at 46 years.
The company is coming off a strong first quarter for fiscal 2022 (ended Nov. 30, 2021), when its revenue of $33.9 billion beat analysts’ expectations of $32.74 billion. Its adjusted earnings per share followed suit, coming in at $1.68 versus the $1.33 analysts had expected. That’s well above the $0.4775 quarterly dividend payout Walgreens is currently making.
The company benefited from the administration of 15.6 million COVID-19 recalls during the quarter, which helped increase traffic in its stores. However, the business has always been profitable, even before the pandemic. Although its profit margins were never high and normally in the low single percentages, it was enough to support the dividend.
Today, with Walgreens trading near 52-week lows, investors have a great opportunity to score a bargain and invest in a safe, trusted brand they can buy and keep for years. .
2. Innovative industrial properties
Another attractive stock to grab today is Innovative Industrial Properties (IIPR) Real Estate Investment Trust (REIT). The cannabis-focused REIT pays 3.3%, a lower return than Walgreens, but it’s the incredible growth path the company has embarked on that makes it a hugely intriguing investment to own.
The company released its fourth quarter and year-end results earlier this week, and revenue of $204.6 million was up 75% year-over-year. Net income and funds from operations (FFO) increased at similar percentages as the company added to its list of properties; during the year, the company made 37 new real estate acquisitions, bringing the total to 103 properties in the portfolio. Its FFO per share for the year topped $6.17 and is higher than the $6 per share annual dividend it currently pays.
And it’s not just finances that are increasing, the dividend as well. IIPR isn’t an aristocrat because it hasn’t been around long enough (it went public in late 2016), but it’s already becoming an impressive dividend investment to own. Today, it pays a quarterly dividend of $1.50, or 10 times the $0.15 it was distributing when it started making regular payments in 2017.
With more growth still on the horizon in the emerging cannabis industry, IIPR seems like an optimal investment and income generator to hold for the long term. And with its stocks down 33% so far in 2022 (likely due to the general decline in not only growth stocks but also the cannabis sector) while the S&P 500 is down just 13%, now may be the time to refuel. this action.
Rounding out this list are consumer defensive stocks Unilever. At 3.9%, its dividend yield is right in the middle, but still well above average. The company’s household products include leading brands such as Ben & Jerry’s, Sunlight and Dove. In total, it has more than 400 brands in its portfolio, covering personal care, beauty, food and home care products. Its global presence in over 190 countries makes it an ideal stock to hold both for its long-term stability and the diversification it offers.
The company is coming off a strong 2021 which showed its highest underlying growth rate in nine years at 4.5%, with sales exceeding 52.4 billion euros. Despite the challenges of rising costs over the year, Unilever says it made price adjustments to counter this; its operating profit last year rose 4.8% to 8.7 billion euros. Based on its earnings last year, the company’s payout ratio is 74%, which is manageable. It has increased its payouts for more than 20 consecutive years, with its dividend per share increasing by 3% in 2021.
Unilever’s stock has seen a more modest decline this year than the S&P 500, falling 10%. However, it is still hovering around its lows for the year and could be an attractive rally for income-oriented investors looking to buy and hold a top-tier stock for the long term.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a high-end advice service Motley Fool. We are heterogeneous! Challenging an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and wealthier.