American Tower (AMT): A Quality REIT With 20% Annual Dividend Growth
American Tower (AMT) is unlike most real estate investment trusts (REITs). The company’s business model has very low maintenance capital needs, throws off excellent free cash flow each year, provides recession-resistant services, and consistently enjoys renewal rates close to 100%. While American Tower isn't one of the 28 best high dividend stocks for current income and only began paying dividends less than six years ago, the company has nearly tripled its quarterly payment over this time and raised its payout each and every quarter. With management targeting at least 20% annual dividend growth forward, let’s take a closer look at this unique REIT. Business Overview American Tower was founded in 1995 and converted to a REIT business structure [...]
Main Street Capital (MAIN): One of the Safest High-Yield BDCs
In this age of record low interest rates, yield-hungry investors have a vast array of high-yield industries to choose from, including Real Estate Investment Trusts (REITs), Master Limited Partnerships (MLPs), YieldCos, and Business Development Corporations (BDCs). While these sectors have business models that make for naturally high-yields, they come with their own inherent risks and challenges. In other words, it can be challenging to know which particular stocks to own for safe, dependable, and growing income (see 28 of the best high dividend stocks here). Let’s take a look at Main Street Capital (MAIN), which is arguably the gold standard of BDCs, to see if this could be an appropriate investment for conservative income investors. Business [...]
Why I Sold Dividend Aristocrat T. Rowe Price (TROW)
Earlier this week, I did something that I really don't like to do. I sold a stock from our Top 20 Dividend Stocks and Long-term Dividend Growth portfolios, exiting my position in T. Rowe Price (TROW). T. Rowe Price, perhaps best known for being one of the 51 dividend aristocrats, is one of the world's largest investment managers with over $800 billion in assets under management (AUM). I originally purchased shares of T. Rowe Price during the summer of 2015 and was attracted to the company for several reasons: Few companies have earned the trust of their clients like TROW, made possible from its long-term track record and scale. Over 80% of TROW's mutual funds outperformed their comparable [...]
Microsoft (MSFT): A High Quality Dividend Growth Stock in Tech
Microsoft (MSFT) is a company legendary for making many investors very wealthy over the decades. In fact, Bill Gates' dividend stock portfolio would not exist if it weren't for Microsoft's incredible growth story. Over the past 14 years the company has become a favorite among many dividend investors, thanks to its dividend achiever status and 15% annual payout growth rate over the last decade. Let’s take a closer look at Microsoft’s business, including the important ways that management is pivoting the company to take advantage of the disruptive technology of the future. Most importantly, learn if Microsoft’s strategy is likely to make it a solid long-term core holding for diversified dividend growth portfolios, such as our Top 20 [...]
Annaly Capital Management (NLY): Is the 10.6% Dividend Yield Safe When Interest Rates Rise?
When it comes to high-yield stocks, few companies offer higher income than mortgage REITs such as Annaly Capital Management (NLY). However, it’s vitally important for dividend investors to realize that this industry is one of the hardest to consistently profit from, for numerous reasons. Let’s take a closer look at Annaly Capital, one of the most popular mREITs, to see if this high dividend stock should be considered by those who need secure and dependable dividend income, such as retirees. Business Description Founded in 1997 in New York City, Annaly Capital Management is the by far the largest and oldest mREIT in America with over $12 billion in assets, which it primarily invests in residential mortgages that [...]
GlaxoSmithKline (GSK): A High Yield but a Lot of Risks to Consider
As the market continues to climb to new record highs, many investors are searching for safe dividend stocks paying high dividends (see 28 such companies here). The healthcare sector, pharmaceuticals in particular, is generally considered a defensive sector thanks to the recession-resistant nature of its product sales. However, while this is true as a whole, not all high-yield pharma stocks are created equal. Let’s take a look at to see if GlaxoSmithKline (GSK), which currently boasts one of the highest yields in the industry, could be a reasonable investment for our Conservative Retirees dividend portfolio. Business Description With roots tracing back to 1715 in London, GlaxoSmithKline is one of the world’s largest pharmaceutical companies, with nearly [...]
Las Vegas Sands (LVS): High-Yield Dividend Income or a Risky Gamble?
Many founder-led companies can make for solid long-term investments, specifically when it comes to dividend stocks. That’s because the founder and CEO owns a large stake in the business and often has a natural incentive to pay a generous and growing dividend, an appealing proposition for income investors seeking to live off dividends. However, that doesn’t necessarily mean that all such companies are worth owning. After all, the ability to pay a secure, growing dividend largely depends on the business model of each company. Let’s take a closer look at Las Vegas Sands (LVS), which is run by its founder, Sheldon Adelson, who along with his wife Miriam own 20% of the company’s shares worth over $9 [...]
Kinder Morgan (KMI): How Appealing Is This Pipeline Giant’s Dividend Going Forward?
In recent years energy transportation and storage stocks and Master Limited Partnerships (MLPs) have become some of the most popular high dividend stocks for income investors to find attractive yields in this record-low interest rate environment. Kinder Morgan (KMI) is one of the oldest names in this space, having helped to popularize the sector with its previous MLPs, Kinder Morgan Energy Partners and El Paso Energy Partners, which were acquired in 2015 by Kinder Morgan Inc (the general partner, sponsor, and manager of their assets). But thanks to the worst oil crash in over 50 years, Kinder Morgan quickly became a cautionary tale about what can go wrong, especially when management takes on too much debt in a highly cyclical [...]
Magellan Midstream Partners (MMP): One of the Best MLPs for Income
Master Limited Partnerships (MLPs) have become some of the most popular high dividend stocks over the past decade. In an age of record low interest rates, midstream (i.e. energy gathering, storage, and transportation infrastructure) MLPs’ tollbooth-like business models are especially appealing for investors living off dividends in retirement. These partnerships typically generate a high percentage of revenue under long-term, fixed fee contracts, allowing these pass-through stocks to pay extremely generous distributions (a tax-deferred form of dividend). However, the worst oil crash in over 50 years has revealed that this industry is more cyclical than many dividend investors thought, and unit prices can be extremely volatile. That’s especially true if an MLP has a highly leveraged balance sheet that [...]
Accenture (ACN) Dips 4% on Earnings: What Dividend Investors Need to Know
What Happened? Accenture (ACN) reported second quarter results that caused its stock to drop 3-4% this morning. Accenture's organic sales grew 6%, and adjusted earnings per share were roughly flat compared to the prior-year period. The company's sales and earnings were roughly in line with analysts' estimates heading into the quarter. Management expects full-year revenue growth of 6-8%, which is slightly higher than its previous forecast of 5-8% growth. Accenture also increased its adjusted earnings per share guidance to $5.70 to $5.87 from $5.64 to $5.87. Accenture's shares hit an all-time high earlier this week before selling off today and have roughly kept pace with the broader market over the last year. Why did the [...]