Who doesn’t love some dividend income? It can be a great way to add cash flow that you can use to either pay bills, fund a trip, or just to add to your savings. Dividend stocks can be good investments for all types of investors to consider.
If you want to generate around $2,500 in dividends per year, you can accomplish that by investing $13,000 into each of the following high-yielding stocks: Verizon Communications (NYSE: VZ), United Parcel Service (NYSE: UPS), and Enbridge (NYSE: ENB). Together, these stocks can diversify your portfolio and bring in plenty of dividend income for your portfolio for years to come. They all yield far more than the 1.1% that the S&P 500 averages.
Image source: Getty Images.
Verizon has been a dependable dividend stock to own for years. It yields 6.8%, and if you invest $13,000 into the stock today, you could expect to collect around $884 in dividends over the course of a full year. Plus, Verizon has been increasing its dividend for 19 consecutive years, which makes it probable that the dividend income will rise in the future.
Although investors aren’t thrilled with Verizon’s stock price performance over the past five years — the stock is down more than 30% over that time frame — the company is in the midst of a restructuring under new CEO Dan Schulman, who recently announced Verizon would be laying off over 13,000 employees.
It’s a challenging time for the business as it looks to reenergize its operations and focus on winning over customers, but at its core, Verizon is still a solid dividend stock. If Schulman is successful in getting the business growing again, you could potentially profit from not only a ton of dividend income, but also gains from the stock rising in value.
Another struggling stock that offers a high payout today is United Parcel Service. Its share price is down more than 40% in the past five years. But with slowing economic conditions and now tariffs weighing down global trade, it’s not surprising that the stock hasn’t exactly been a hot buy.
Its payout ratio is a little over 100%, which can be concerning, but that should come down as it sheds costs. UPS is working on improving efficiency, and it recently announced it would be laying off 48,000 workers this year. The company prides itself on its dividend, saying that it’s one of the company’s “core principles” and it boasts that it has either maintained or increased its dividend every year since 1999 (when it went public).
If you’re willing to trust in UPS’ commitment to its dividend, you could be rewarded with an incredible payout right now, as it yields 6.6%. It’s a slightly lower rate than Verizon, but a $13,000 investment here would still net you around $858 in annual dividends.
Enbridge is the one stock on this list that has a fairly high payout, and that’s performed well in five years, rising by around 38% during that time frame. And yet, it still offers a fairly high yield of 5.9%. This is another solid dividend growth stock as Enbridge has recently announced an increase to its payout, which extends its streak of annual increases to 31 years.
It makes for a fairly stable business to invest in as it has a lot of visibility into its growth and earnings; it’s on track to hit its financial guidance for a 20th consecutive year. The company continues to project single-digit growth next year, as new projects contribute to its growth and it works on improving the optimization and utilization of its assets.
All in all, Enbridge is one of the better dividend stocks to buy and hold, given its stability and continued growth. If you invest $13,000 into the Canadian-based pipeline company, you’ll get $767 in annual dividends from this stock. That would put the total dividend income from all these investments at approximately $2,510 for a full year.
Before you buy stock in Verizon Communications, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Verizon Communications wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you’d have $509,039!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $1,109,506!*
Now, it’s worth noting Stock Advisor’s total average return is 972% — a market-crushing outperformance compared to 193% for the S&P 500. Don’t miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
David Jagielski, CPA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Enbridge and United Parcel Service. The Motley Fool recommends Verizon Communications. The Motley Fool has a disclosure policy.
