Investors love dividend stocks because they provide dependable passive income streams and an excellent opportunity for solid total return. Total return includes interest, capital gains, dividends, and distributions realized over time. In other words, the total return on an investment or portfolio consists of income and stock appreciation. At 24/7 Wall St., we have focused on dividend stocks for over 15 years because, despite the stock market’s ups and downs, many people need reliable passive income streams to supplement their income from employment or other sources such as Social Security and pensions.
The World Federation of Exchanges has estimated there are approximately 45,000 to 58,000 listed companies across all global exchanges at any given time. So if there are a few that you may not be aware of, you are not alone. We decided to screen our 24/7 Wall St. dividend stock database, looking for companies that pay a 6% or higher yield and are quality names with dependable, growing dividends. Five hit our screens, and don’t be surprised if some or all of them are new to you. Four of the five are rated Buy at the top Wall Street firms we cover.
Why do we cover dividend stocks?
Since 1926, dividends have accounted for approximately 32% of the S&P 500’s total return, while capital appreciation has accounted for 68%. Therefore, sustainable dividend income and the potential for capital appreciation are essential to total return expectations. A study by Hartford Funds, in collaboration with Ned Davis Research, found that dividend stocks delivered an annualized return of 9.18% over the 50 years from 1973 to 2023. Over the same timeline, this was more than double the annualized return for non-payers (3.95%).
Plains All American Pipeline
Plains All American Pipeline (NYSE: PAA | PAA Price Prediction) stock was locked in a tight trading range before breaking out, and it offers a dependable 7.24% dividend yield. The company engages in the pipeline transportation, terminalling, storage, and gathering of crude oil and natural gas liquids (NGLs) in the United States and Canada. It operates in two segments.
The Crude Oil segment offers:
- Gathering and transporting crude oil through pipelines
- Gathering systems
- Trucks, barges, or railcars
- Terminalling, storage, and other facilities-related services and merchant activities
The Natural Gas Liquids segment provides:
- Gathering
- Fractionation
- Storage
- Transportation
- Terminalling activities
- Ethane, propane, normal butane, iso-butane, natural gasoline, and crude oil refining processes
Stifel has a Buy rating with a $22 target price.
Universal
Universal (NYSE: UVV) is one of the world’s leading tobacco merchants. While this company’s products may not be for everyone, they have strong demand, have been in business for almost 150 years, and offer shareholders a hefty 6.31% dividend. The company is a Dividend King having raised its dividend for over 50 straight years.
Universal processes and supplies leaf tobacco and plant-based ingredients worldwide through two segments:
- Tobacco Operations
- Ingredients Operations
It procures, finances, processes, packs, stores, and ships leaf tobacco for sale to manufacturers of consumer tobacco products:
- Contracts, purchases, processes, and sells flue-cured, burley, and oriental tobaccos that are primarily used in the manufacture of cigarettes
- Dark air-cured tobaccos manufacture naturally wrapped cigars, cigarillos, and smokeless and pipe tobacco products
Universal also provides value-added services, including:
- Blending, chemical, and physical tobacco testing
- Service cutting for various manufacturers
- Manufacturing reconstituted leaf tobacco
- Just-in-time inventory management services
- Electronic nicotine delivery systems
- Customer smoke testing services
USA Compression Partners
USA Compression Partners (NYSE: USAC) provides natural gas compression services under term customer contracts. While perhaps less well known than its peers, this top company pays shareholders one of the industry’s largest dividends at 7.86%.
The company offers compression services to:
- Oil companies and independent producers
- Processors
- Gatherers
- Transporters of natural gas and crude oil, as well as operating stations
USA Compression Partners primarily provides natural gas compression services for infrastructure applications, including centralized natural gas gathering systems, processing facilities, and gas-lift applications for crude oil wells.
Raymond James has an Outperform rating with a $30 target price.
VICI Properties
Vici Properties (NYSE: VICI) is a real estate investment trust based in New York City that specializes in casino and entertainment properties. With a stellar dividend yield of 6.21%, this is one of the top picks across Wall Street in the net lease group, and it is ideal for more conservative investors seeking gaming exposure and a substantial dividend.
VICI Properties is an S&P 500 experiential real estate investment trust with one of the largest portfolios of market-leading gaming, hospitality, and entertainment destinations, including three iconic entertainment facilities on the Las Vegas Strip:
- Caesars Palace Las Vegas
- MGM Grand
- Venetian Resort Las Vegas
The company owns 93 experiential assets across a geographically diverse portfolio of 54 gaming properties and 39 other experiential properties across the United States and Canada. The portfolio comprises approximately 127 million square feet and features approximately 60,300 hotel rooms, as well as over 500 restaurants, bars, nightclubs, and sportsbooks. Its properties are occupied by industry-leading gaming, leisure, and hospitality operators under long-term, triple-net lease agreements.
VICI Properties has a growing array of real estate and financing partnerships with leading operators in other experiential sectors, including:
- Bowlero
- Cabot
- Canyon Ranch
- Chelsea Piers
- Great Wolf Resorts
- Homefield
- Kalahari Resorts
It also owns four championship golf courses and 33 acres of undeveloped and underdeveloped land adjacent to the Las Vegas Strip.
Baird has an Outperform rating with a $34 target price.
Virtus Investment Partners
With shares way off a 52-week high, Virtus Investment Partners (NYSE: VRTS) could be a total-return home run for investors. It provides investment management and related services to institutions and individuals in different investment products and through multiple distribution channels. And it offers a 6.61% yield with a payout ratio near 46.56%, suggesting that the dividend is well-covered by earnings.
The company provides various asset classes (equity, fixed income, multi-asset, and alternatives), geographies (domestic, global, international, and emerging), market capitalizations (large, mid, and small), styles (growth, core, and value), and investment approaches (fundamental and quantitative). Its retail products include open-end funds, closed-end funds, and retail separate accounts.
Its institutional products are offered to a variety of institutional clients through separate and commingled accounts, including sub-advisory services to other investment advisers and its sponsored structured products. These products are marketed through relationships with consultants and directly to clients.
Baird also has an Outperform rating and a $34 target price on this stock.
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