24/7 Wall Street insights

• Any government attempt to slow inflation does not prevent a rise in the price of goods and services, only the speed of that rise.
• Among the passive income options available to most people, dividend stocks offer the widest array of options to suit the broadest range of investment preferences.
• For investors seeking dividends, click here for a free report on two high dividend stock

Passive income can take many forms. Some examples include: rent from real estate, royalties from book sales, and different kinds of investments. Passive income to supplement regular paychecks can often make the difference between having to tighten belts and starving to keep the lights on or successfully covering the monthly bills.

Dividend Stocks May Be the Answer

24/7 Wall Street has an enormous database of dividend stocks to suit all levels of risk tolerance, and has published numerous past articles highlighting them. The following stocks may not be familiar, but they are all companies with plenty of information available for further research and investigation. A cumulative $20,000 investment – $5,000 in each of these four stocks – would equate to an annual yield of 7.69%, independent of any capital appreciation on the upside. 

Yields and passive income amounts are based on market price at the time of this writing. 

Verizon Communications

Stock #1 : Verizon Communications (NYSE: VZ)

Yield: 6.61%

Shares for $5,000:~124.25

Annual Dividend Income: ~$330.50

Verizon was formed in 2000 from the former “Baby Bell” companies, Bell Atlantic and Nynex, along with GTE, which were originally all part of AT&T (NYSE: T), or Ma Bell, and split up in 1984 by the DOJ in an antitrust case. In light of the current antitrust obsession demonstrated by Lina Khan and the FTC, it’s interesting to note that Verizon Communications is the presently the largest US wireless carrier, based on its extensive national network.

Although Verizon has the largest domestic US wireless network, the company acknowledges that with over half of its revenues derived from that sector, it has more vulnerabilities if there are issues with satellite signals or other wireless related service problems than its competitors. Therefore, Verizon is in the process of further developing its 5G and AI technologies.

Verizon’s FIOS optic fiber system is the core of its 5G network and they proudly advertise that it has been the recipient of the greatest number of consumer awards for customer satisfaction and internet speeds over the past decade. FIOS’ superior speed results in lower latency, a feature that has become a driving force behind the growth of the 5G IoT (Internet of Things) market. Verizon recently announced a deal with KDDI of Japan to provide 4G/5G IoT connectivity for an electric vehicle from Sony Honda Mobility. Sony Honda has christened it the AFEELA line of EVs, and they are expected to launch by 2025 with a U.S. debut by 2026.

On the AI front, Verizon is deploying human-assisted GenAI applications to streamline processes, better equip Verizon employees, and to enhance the customer service experience. 

The AI tools guide human representatives, propose best solutions suggestions for customer problems, and subsequently generate a higher rate of customer satisfaction reports. Verizon states that its GenAI platform has improved accurate customer inquiry problem solving to 95%.

The GenAI’s key innovations immediately steer personal customer information to the customer service rep best suited for the problem at hand. For example, an international service query would be routed to the rep most experienced in that sector. The GenAI then suggests the menu of solutions with the most comprehensive one highlighted.

Verizon’s most recent AI innovation is to use AI machine learning to identify and analyze any risks to its underground fiber optic network. The 10 million annual 811 requests nationwide to dig underground for excavation, construction, electrical or sewage repair, or any other reason causes accidental damage to thousands of fiber optic lines. The new AI powered Verizon 811 system is expected to drastically reduce FIOS service outages and cut yearly repair costs by being proactive in preventing fiber optic infrastructure damage.

Omega Healthcare Investors, Inc.

Stock #2 : Omega Healthcare Investors, Inc. (NYSE: OHI)

Yield: 7.23%

Shares for $5,000: ~135.46

Annual Dividend Amount: ~$361.50

Real Estate Investment Trusts (REIT) are registered with the SEC. In return for their public listings and access to the capital markets, REITs are required to remit 90% of the profits to shareholders. This is a win-win for investors desiring the strong income streams from real estate rent rolls but without the management headaches and high entry costs. REITs can focus on different aspects of the real estate industry, from properties in the residential and commercial sector to factories, shopping malls, mortgages, financing, and a host of other sectors.

Omega Healthcare Investors Inc. is based in Hunt Valley, MD. The company’s specialty niche is in the long-term care, senior housing, and assisted living industry. Since going public in 1992, Omega has supplied financing, capital and triple-net leasing to 77 US and UK operators across 900 different facilities, providing over 86,000 beds. Its real estate investments are estimated at $10.2 billion.

From a risk mitigation perspective, Omega has spread its US operations to 42 separate states, and only 2 of the 77 operators account for 10% of revenues. Its triple-net leasing minimizes operating expenses, since labor, property taxes, insurance, and capital expenditures are all  borne by the operators. 

From a shareholder income perspective, Omega has consistently paid its quarterly dividend payouts with no cuts or suspensions, even during the pandemic. On Aug. 1, Omega Healthcare Investors reported Q2 2024 operating results. Its $252.75 million revenues beat the analyst consensus estimate of $243.04 million and surpassed $250.19 million in Q2 2023. FFO of $0.71 per share beat the analyst consensus estimate of $0.69.

As lifespans continue to increase thanks to improved medical technologies and practices, Healthcare REITs are anticipated to continue to grow as a specialty REIT subsector.

MPLX LP

Stock #3 : MPLX LP (NYSE: MPLX)

Yield: 8.21%

Shares for $5,000: ~120.71

Annual Dividend Amount: ~$410.50

Much like telecom data and communication networks, the oil and gas industry also has its own infrastructure network to transport and store products. The oil and gas industry’s network is referred to as the midstream sector. It consists of pipelines, storage facilities, processing and transport terminals, maritime tankers, trucks, and other infrastructure facilities. Midstream companies that trade publicly are organized as Limited Partnerships or Master Limited Partnerships. Similarly to REITs, they are required to remit 90% of profits to shareholders.

MPLX LP is based in Findlay, OH. Incorporated in 2012, MPLX LP is a subsidiary of Marathon Oil (NYSE: MPC). There are two primary operations units, in addition to Marathon Oil’s Capline and Mark West pipeline networks. 

Logistics and Storage handles transportation, distribution, storage and marketing of crude oil, refined products and other hydrocarbon-based products throughout the U.S. These assets consist of a network of wholly and jointly-owned common carrier crude oil and refined product pipelines, associated storage assets, refined product terminals, storage caverns, refinery integrated tank farm assets, rail and truck racks, a marine business, export terminals, and wholesale and fuels distribution businesses.

Gathering and Processing is dedicated to natural gas and separating various hydrocarbon components from it for different markets. The heavier and more valuable hydrocarbon components, which have been extracted as a mixed NGL stream, are then further separated into their component parts for end-use sale through the process of fractionation. MPLX sells basic Natural Gas Liquid (NGL) products, including ethane, propane, normal butane, isobutane and natural gasoline.

MPLX LP’s Q2 2024 earnings reported $3.05 billion revenues, exceeding analysts’ $2.92 billion target and Q2 2023’s reported $2.69 billion. EPS of $1.15 beat the consensus target of $0.98. For income investors, MPLX LP has increased its dividend annually since 2013. 

Spok Holdings, Inc.

Stock #4 : Spok Holdings, Inc. (NASDAQ: SPOK)

Yield: 8.72% 

Shares for $5,000: ~346.02

Annual Dividend Amount: ~$436.00

In an age where healthcare and medical treatment of patients has become proliferated with digital data, electronic communications of data between health care professionals, treatment centers, and patients, along with their families, is now the expected standard. 

Alexandria, VA headquartered Spok Holdings serves a crucial medical communications niche. Designed to enhance workflows and support administrative compliance, its Care Connect suite products link the following services to the aforementioned parties:

• Clinical Alerts
• Contact centers
• Mobile communications and messages
• Public Safety Alerts.
• License updates
• Software Updates
• Product support services

Spok’s customers are in the US, Canada, Europe, Asia, Australia, and The Middle East. The remote services are provided through the proprietary Spok GenA Pager unit. 

Spok provides field communications for businesses, construction industry workers, sales professionals and government workers, in addition to serving the medical and healthcare services sectors.

Spok Holdings recently added 19 new customer contracts and 4 multi-year engagements in Q1 2024. It is positioned to leverage 5G and IoT, which is also a part of current telecommunications trends. The company is debt-free, $23.3 million cash positive. 

A dividend stock portfolio should be prudently monitored, like any stock portfolio. However, dividends are subject to change if there are business or news events that can trigger a decrease, increase, or a delay. Investors relying on the income from dividend stocks are wise to follow a few alternates with comparable yields that can be swapped when needed. 

Name:	Yield:	Annual Passive Dividend Income:
Verizon Communications (NYSE:VZ)	6.61%	~$330.50
Omega Healthcare Investors, Inc. (NYSE: OHI)	7.23%	~$361.50
MPLX LP (NYSE: MPLX)	8.21%	~$410.50
Spok Holdings, Inc. (NASDAQ: SPOK)	8.72%	~$436.00
Total:		$1,538.50

 

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.