The market is trading near all-time highs, which can make it hard to find attractively priced stocks to buy. But don’t fear, there are strong options out there, even for investors who like dividend stocks. Here’s why income investors will want to consider buying, or even doubling up on, Realty Income (NYSE: O), Hershey (NYSE: HSY), and Hormel Foods (NYSE: HRL).
1. Realty Income just raised its dividend
Realty Income is the largest net lease real estate investment trust (REIT). A net lease requires the tenant to pay most property-level operating costs, which, simplifying things greatly, allows the landlord to sit back and just collect rent. Although any single property is high risk, net leases are usually single-tenant properties, so across Realty Income’s 15,400 properties the risk is very low.
Add in an investment-grade rated balance sheet, a globally diversified portfolio, and 30 years of annual dividend increases, and dividend investors will probably find the backstory here very attractive.
That said, the swift rise in interest rates has been a headwind for the REIT sector, which makes use of leverage to fund property acquisitions. Investors have pushed even the biggest and best REITs lower, leaving Realty Income with a yield of 5.5%. That is near the highest levels of the past decade, which suggests that the stock is on sale today.
But don’t go in thinking that there’s a problem — Realty Income just raised its monthly pay dividend (again). This REIT is chugging along just fine even in the face of higher rates.
2. Hershey’s chocolate is getting more costly
Hershey is an icon in the confections space. The consumer staples company has increased its dividend annually for 15 years, with an impressive annualized dividend growth rate of roughly 10% over the past decade. And the 2.6% yield is historically attractive. The company’s growth plans include its ongoing efforts with innovation in its core portfolio, expansion into salty snacks, and a push into global markets with its most prominent brands. So far so good.
The problem is that Hershey is facing an extraordinary…
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