Whether you want to retire early, work less, or simply have extra money to fund a vacation, dividend stocks can provide you with the cash flow to help you reach your goals. The key is to find high-yield stocks that aren’t too risky to avoid disappointment later on.
Three stocks that can be great dividend investments to build your portfolio on are Pfizer (NYSE: PFE), BCE (NYSE: BCE), and Western Union (NYSE: WU). All of this will reward you more than four times what you’d get with the S&P 500’s average yield of 1.3%. Here’s how you can invest $23,000 in each of these stocks and receive more than $5,000 in dividend income per year.
1. Pfizer
One of the best dividend stocks available right now is Pfizer. The healthcare giant’s yield is approximately 5.9%, which is unusually high for a company’s stock, but this is partly due to its sluggish stock price. The stock has fallen 13% over the past five years, but weak COVID-19-related revenue growth and the impending expiration of multiple patents have investors concerned about the company’s long-term prospects. It has become.
However, Pfizer has made a number of acquisitions in recent years and invested in strengthening its growth prospects. One exciting opportunity could be to carve out a slice of the lucrative anti-obesity market, which could exceed $100 billion by the end of this decade. Pfizer doesn’t have an approved treatment yet, but it does have a once-daily pill that has so far produced promising results. In the future, you may see significant growth in your business. With over 110 programs in the pipeline, Pfizer still has a lot of potential, so investors shouldn’t get too bearish on the stock.
Although the company has had some weak quarterly results recently due to asset impairment charges, Pfizer still has a bright future and the rewards are great for investors who want to remain patient with the healthcare stock. It could become something. If you invested $23,000 in Pfizer today, you would receive approximately $1,360 in dividends over the course of one year.
2. B.C.
Another great reliable dividend stock to own is BCE. Canadian carriers are industry leaders, and the appeal of their operations is consistency. The company has steadily increased its sales from C$22.9 billion ($16.9 billion) in 2020 to C$24.7 billion in 2023.
As long as you don’t expect rapid growth and invest in stocks primarily for stability and dividend income, you probably won’t be disappointed with this investment. BCE has an incredibly low average beta of around 0.50, making it less sensitive to market fluctuations, making it an attractive option for risk-averse investors.
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Telecom stocks are not a buy in a high interest rate environment, but that could change if interest rates fall. In the meantime, if you buy BCE stock for its high dividend yield of 8.5%, you can earn a lot of ordinary income. If you invest $23,000 in the company, you’ll receive about $1,950 or more in dividends per year.
3. Western Union
Investors can also buy another high-dividend stock in Western Union. Although consumers have more payment options to choose from these days, Western Union remains a trusted international brand. One area that is particularly strong is digital trading. In the most recent quarter ended June 30, consumer remittance transactions increased 4% year over year. However, for branded digital transactions, the growth rate was even higher at 13%.
The company expects to generate solid operating margins of about 20% this year, with earnings per share expected to be at least $1.62, enough to pay an annual dividend of $0.94 per share. This is an amount that can be covered. This is a great sign of Western Union’s resilience, as the company’s revenue has declined this year due to weakness in some international markets.
Considering the stock’s modest price of less than $12, buying the stock now would yield an 8% yield. This gives you $1,840 in annual dividend income from your $23,000 investment. Combined with the other investments on this list, the total annual dividend income is approximately $5,150 based on a total investment of $69,000. You also get great diversification with these investments, as each stock focuses on a different sector.
Should I invest $1,000 in Pfizer right now?
Before purchasing Pfizer stock, consider the following:
Motley Fool Stock Advisor’s team of analysts has identified the 10 best stocks for investors to buy right now. Pfizer was not among them. These 10 stocks have the potential to generate impressive returns over the next few years.
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David Jagielski has no position in any stocks mentioned. The Motley Fool has a position in and recommends Pfizer. The Motley Fool has a disclosure policy.
Want $5,000 or more in annual dividends? Invest $23,000 in each of these 3 stocks originally published by The Motley Fool
