Dividend stocks can be powerful tools in helping investors battle inflation in the long run. They can provide you with a recurring source of income that (ideally) rises over time and helps build up your wealth. Three stocks that pay more than double the S&P 500 average yield of 1.5% and that could be great places to invest in right now include Verizon Communications (NYSE: VZ), Pfizer (NYSE: PFE), and Realty Income (NYSE: O). If you can afford to invest $33,000, here’s how you can spread that out over these three stocks to generate at least $2,000 in annual dividends.
Verizon Communications: $15,000
Telecom giant Verizon Communications pays an incredibly high yield of 6.4% right now, which is far higher than normal for this top dividend stock. Investing $15,000 into the stock would mean you can expect to collect $970 annually from the dividend Verizon pays.
Verizon has also increased its dividend payments for 17 consecutive years, which is the longest streak in the U.S. telecom industry. The company’s CEO believes that the stock is a potential substitute for bonds given its reliable dividend income. That suggests that if interest rate cuts happen this year, Verizon’s stock could be in high demand as investors potentially pivot from bonds into dividend stocks.
Rising interest rates haven’t helped Verizon’s stock, as it is down 1% in the past 12 months. But what’s important is that the payout remains safe. In 2023, the company’s free cash flow rose to $18.7 billion versus $14.1 billion a year earlier. While operating revenue was down 2% to $134 billion, the improved cash position suggests that not only is the current yield safe, but also that Verizon’s dividend growth steak is likely to continue.
Pfizer: $13,000
Another stock that’s paying a higher-than-normal yield is Pfizer. The pharma giant’s shares have fallen close to 40% in just the past 12 months. Its dividend yield is slightly lower than Verizon’s at 6.2%, but that’s still a fairly high payout for investors. If you were to buy $13,000 worth of Pfizer shares, your annual dividend income from that investment…
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