How can I 'quiet' my portfolio? Here are 3 top dividend stocks for stable cash return and inflation protection - one of them even offers an incredible 14.9% yield




How can I
How can I 'quiet' my portfolio?  

When high-flying growth stocks made all of the headlines last year, dividend stocks often got ignored. But now, the Nasdaq is in correction territory, and many of those former hot stocks are getting heavily sold off.

In volatile times like these, a steady and increasing stream of dividends can help risk-averse investors quiet things down and sleep better at night.

Healthy dividend stocks have the potential to:

  • Offer a plump income stream in both good times and bad times.

  • Provide much-needed diversification to growth-oriented portfolios.

  • Outperform the S&P 500 over the long haul.

Here's a look at three stocks with oversized dividends. Remember, you don't have to start big.

  • Mitt Romney says a billionaire tax will trigger demand for these two physical assets - get in now before the super-rich swarm

  • Stocks are down, but "cash is not a safe investment," says Ray Dalio - get creative to find strong returns

  • Warren Buffett likes these 2 investment opportunities outside of the stock market

JPMorgan Chase (JPM)

Let's start with a bank stock.

With inflation running hot, people are concerned about the continuous interest rate hikes from the Fed. But as it turns out, banks typically do well in a rising interest rate environment.

Banks lend money at higher rates than they borrow, pocketing the difference. When interest rates increase, the spread for how much a bank earns widens.

JPMorgan Chase is the largest U.S. bank, with a whopping $4.0 trillion in assets. The stock had a strong rally in 2021 but later gave up some of the gains. Year to date, it's down around 29%.

The latest financials didn't cheer up investors. In Q1, JPMorgan produced $2.63 per share in earnings, down from the $4.50 per share earned in the year-ago period.

Dividend checks, on the other hand, remain plentiful. Last summer, the bank announced an 11% increase to its quarterly dividend rate to $1 per share.

It currently yields 3.5%, which is higher than what's offered at Goldman Sachs (2.6%), Bank of America (2.6%) and Wells Fargo (2.5%), but below Morgan Stanley (3.6%).

Walgreens Boots Alliance (WBA)

Despite being one of the essential service providers, Walgreens hasn't been a market darling. The company's shares have tumbled more than 40% in the last five years.

Dividends, however, have only increased. In July of 2021, Walgreens boosted its quarterly payout by 2.1% to 47.75 cents per share, marking its 48th consecutive annual dividend increase.

Looking further back, you'll see that the retail pharmacy giant has paid uninterrupted dividends for more than 88 years.

The company has a growing business to back its rising dividends. In the three months ended Feb. 28, sales from continuing operations rose 3% year over year to $33.8 billion. Meanwhile, adjusted earnings per share grew 25.9% to $1.59.

Today, Walgreens yields 4.7%, a generous amount compared to competitors like CVS Health (2.4%) and Walmart (1.8%).

Annaly Capital Management (NLY)

For the real yield hunters, Annaly Capital Management deserves a look.

The company is not nearly as well known as the stocks mentioned above, but it offers a staggering annual yield of 14.9%.

Structured as a real estate investment trust, Annaly is a diversified capital manager. The REIT invests in agency mortgage-backed securities, residential real estate, and middle-market lending.

Shares tumbled more than 50% during the pandemic-induced market crash in early 2020. Since then, Annaly has made a strong recovery. While the stock is not quite back to where it was before COVID, the sheer size of its dividend payments make it stand out.

The REIT reported earnings last month. For Q1, earnings available for distribution came in at 28 cents per share, which covered its dividend 1.25 times.

In the earnings conference call, Chief Financial Officer Serena Wolfe said, "We have, in recent quarters, communicated that we anticipate earnings to moderate, which we still foresee, though we continue to expect earnings to sufficiently cover the dividend for the near term, all things equal."

What to read next

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

COMMENTS

More Related News

How Rich Are President Joe Biden, VP Kamala Harris and the Wealthiest US Politicians?
How Rich Are President Joe Biden, VP Kamala Harris and the Wealthiest US Politicians?

While politicians in the U.S. tend to earn substantial salaries, it's usually not indicative of their true wealth. In addition to those government paychecks,...

'It's going to be government money': Jim Rogers just issued a serious warning to crypto investors - here are the 2 shockproof assets he likes instead

Rogers knows how to survive - and thrive - in turbulent times.

How can I generate some steady income in this volatile market? Here are 3 top-rated stocks yielding up to 7.5% (with fat upside to boot)
How can I generate some steady income in this volatile market? Here are 3 top-rated stocks yielding up to 7.5% (with fat upside to boot)

The market is unstable. Your portfolio doesn't need to be.

'The economy is very weak': Here's why Cathie Wood believes the Fed will actually cut rates in 2023 - plus 3 stocks she likes right now to capitalize

The super investor sees softness. But is sticking to her guns.

Kevin O
Kevin O'Leary says these are the best assets to own as inflation stays white hot

Inflation is still near multi-decade highs. Mr. Wonderful is using these stocks to fight back.

Leave a Comment

Your email address will not be published. Required fields are marked with *

Cancel reply

Comments

Top News: Economy