Investing

Get Paid Whether You Work or Not? You Can, If You Buy These Dividend Stocks

Rich Duprey

Published: September 23, 2024 1:20 pm

The 9-5 grind is real. You have to work if you want to eat. But what if you could still have income, but not get out of bed? No, this isn’t some late-night infomercial promising some get-rich quick scheme, but what could be your reality by investing in dividend stocks. 

Most people don’t own their own income. Going into the office every day to get a paycheck means you rely upon someone else for your salary. It means you don’t own your income. Your boss does. If you lose your job, the paychecks stop coming in.

But it doesn’t have to be that way. By investing in dividend-paying stocks, you can build up a stream of income that could sustain you in the event your job goes away. You can still get paid anyway!

It’s not going to happen overnight, but regularly investing in companies that pay you to buy their stocks can make that a reality. Dividend stocks are how you can own your own income and live free from the 9-5 grind. All you need to do is build up a portfolio of quality companies that regularly grow their payout over time and you can become the master of your own paycheck.

Below are three of the best dividend growth stocks that you can buy now. You won’t be quitting your regular job tomorrow, but they offer the greatest hope of breaking free from having to work for someone else over the long term.

Key Points About This Article:

• If you’re working for someone else then you don’t own your income. An investor can change that and get paid whether he works or not by buying dividend stocks.
• Building a portfolio of companies that reward their shareholders by paying dividends and growing them over time can help you become financially independent from your job.
• If you’re looking for some stocks with huge potential, make sure to grab a free copy of our brand-new “The Next NVIDIA” report. It features a software stock we’re confident has 10X potential.

JPMorgan Chase (JPM)

The first dividend growth stock you should consider buying to eventually own your own income is bank stock JPMorgan Chase (NYSE:JPM). It just announced a big 8.7% hike to its dividend, bringing the quarterly payout to $1.25 per share. It has a starting yield of 2.3% annually, which is actually lower than where it stood last year, but that’s because JPM stock is soaring, up 43% from where it stood 12 months ago.

There’s a good reason for that. JPMorgan is a monster bank. It reported record profits in the second quarter, hitting $18.1 billion, a 25% increase from the previous year. It has massive global scale that allows its commercial and retail banking arms; credit cards; and asset and wealth management services to reach areas unattainable by other banks.

Investors should also note that its latest dividend increase is actually its second hike this year. In March, it raised its dividend 9.5% after recording record profits for 2023. In fact, it had only raised the payout to $1.05 per share in last year’s third quarter, a 5% jump, meaning in less than a year JPMorgan’s dividend has grown 25%. 

You shouldn’t count on that kind of growth regularly, but it has a 10-year compound annual growth rate (CAGR) of 12.4%, making it a strong addition to your portfolio.

Realty Income (O)

Real estate investment trust (REIT) Realty Income (NYSE:O) is the next dividend growth stock to buy for financial independence. It also just announced a new dividend hike, this one for 0.2%. While that may seem quite small, investors should understand the REIT raises its payout every single quarter. 

That means that over the last five years, Realty Income has raised its dividend at a 3.6% CAGR and over the past decade it has jumped 3.9% annually. That’s very healthy for a REIT. Moreover, Realty Income’s dividend offers investors a lucrative yield of 5%, so you’re getting regular growth and income. 

The other notable feature about the REIT is that it pays its dividend monthly. The latest dividend increase was Realty Income’s 108th consecutive quarterly hike since it listed on the NYSE in 1994. Further, the dividend payment represents the 651st consecutive monthly dividend over its 55-year operating history. It is why the REIT deserves a spot in your portfolio.

Altria (MO)

Last on the list of dividend growth stocks to buy is tobacco giant Altria (NYSE:MO). Just like the other stocks on this list, the cigarette maker also announced a new dividend increase. Yet Altria has a longer history of paying a dividend and raising it than the others. It paid its first dividend in 1928 and has increased it every year since 1969. That string of 55 years of consecutive hikes makes the tobacco stock a Dividend King.

While Altria’s latest increase was 4%, it offers investors an enticing yield of 8% annually. While you shouldn’t chase yield, since high-yielding stocks can often have problems, the owner of the Marlboro brand of cigarettes has a very safe dividend. Although its payout ratio, or the amount of its earnings it pays out as dividends, stands at around 83% — normally a very high and worrisome level — that’s not the case for Altria.

The tobacco king is in a very mature industry. Growth will be slower than investors will find elsewhere. For that reason, management has consciously chosen to reward investors by paying out most of its profits as dividends and says it targets a payout ratio of about 80% of earnings.

Even though smoking is in a secular decline, the rise of reduced-risk alternatives indicates Altria still has many years of profitable growth ahead of it.