3 High Dividend Yield Stocks I'm Buying with My Fist - Latest Global News

3 High Dividend Yield Stocks I’m Buying with My Fist

There are three main categories of investors: growth investors, income investors and value investors. I would classify myself as a mix of all three, except my focus is on future income rather than current income.

My desire for future income to fund retirement later has made dividends more important than ever to me. Here are three high-yield dividend stocks I’m buying right away.

1. Enterprise Products Partners LP

Enterprise Products Partners LP (NYSE: EPD) is a leading US midstream energy company. Its platform includes over 50,000 miles of pipeline transporting natural gas, natural gas liquids (NGLs), crude oil and petrochemicals.

While I don’t rely on the distribution to generate income now, I like Enterprise’s 7.2% distribution yield. And I’m absolutely thrilled with the company’s track record of 25 years of continuous sales growth with a compound annual growth rate of around 7%.

This high return means that Enterprise doesn’t need to achieve a large increase in unit prices to achieve high total returns. However, the increase in unit prices probably won’t be too difficult. U.S. natural gas, NGL and oil production is expected to increase over the remainder of this decade – and the foundations are in place for this trend to continue over the longer term. The company is gearing up for growth with nearly $7 billion worth of major projects under construction.

Valuation shouldn’t stand in the way of Enterprise’s growth either. The stock trades at just 10.7 times expected earnings.

In my opinion, the biggest downside to purchasing Enterprise Products Partners is the tax expense associated with investing in a limited partnership. However, the benefits this stock offers make the additional tax filing requirements worth the hassle for me.

2. Pfizer

Pfizer (NYSE:PFE) is one of the world’s largest biopharmaceutical companies. Its products include blockbuster drugs for cancer, infectious diseases, rare diseases and more. Pfizer is also known for its vaccines.

The company’s impressive product range generates enough cash flow for Pfizer to pay a hefty dividend yield of over 5.8%. Management remains committed to maintaining and increasing the dividend while reducing debt and investing in the business.

Pfizer’s forward price-to-earnings ratio is below 13. That’s a much more attractive valuation than that S&P 500 The healthcare sector’s future earnings multiple is 18.4.

However, two dark clouds hover over Pfizer. Sales of the company’s COVID-19 products have plummeted. Pfizer also faces a major patent cliff in the next few years as key patents on several drugs expire. However, despite these challenges, I still like Pfizer’s overall growth prospects due to new product launches and recent acquisitions.

3. Verizon Communications

I haven’t started buying shares yet Verizon Communications (NYSE:VZ) I’m not handing over the fist yet, but I plan to do so soon. The company is, of course, a global telecommunications leader with millions of customers.

I’d be lying if I said that Verizon’s 6.6% dividend yield wasn’t an important factor in my decision to buy the stock. Like Enterprise Products Partners and Pfizer, the dividend gives Verizon a good head start in delivering attractive total returns. Another big plus: The telecommunications giant has increased its dividend payout for the 17th year in a row.

Many stocks are currently expensive. Not Verizon. The stock trades at less than 8.8 times expected earnings.

What is the biggest setback against Verizon? Slow growth. The company’s revenue increased just 0.2% year-over-year in the first quarter of 2024. Profit fell to $4.7 billion from $5 billion in the same period last year.

However, Verizon continues to generate strong free cash flow. His balance sheet is getting stronger. I expect the stock to rise over the next few years, even if the company’s revenue growth isn’t impressive.

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Keith Speights has held positions at Enterprise Products Partners and Pfizer. The Motley Fool has positions in Pfizer and recommends it. The Motley Fool recommends Enterprise Products Partners and Verizon Communications. The Motley Fool has a disclosure policy.

“3 High-Yield Dividend Stocks I’m Buying Hand Over Fist” was originally published by The Motley Fool

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