The inventory market lately took an enormous dip, pushed down by issues about how a lot tariffs will have an effect on the economic system. One of many advantages of falling inventory costs is that dividend yields transfer in the wrong way. That permits buyers to lock in even greater yields on some high-quality dividend shares.
I lately capitalized on the dip out there to deploy some money in my retirement account so as to add to my place in a number of top-notch dividend shares, together with VICI Properties (NYSE: VICI), Verizon (NYSE: VZ), and Real Elements Firm (NYSE: GPC). This is why I feel they’re low-risk shares to purchase amid the present market turmoil.
Amid the market downturn, VICI Properties’ inventory has dipped greater than 10% from its latest peak. That has pushed up the dividend yield of the true property funding belief (REIT) to five.7%, nicely above the S&P 500‘s 1.5% yield.
The REIT’s high-yielding payout is on a really secure footing. It produces very steady money circulation from its portfolio of high-quality experiential actual property, like casinos and sports activities and leisure complexes.
It leases these properties to working tenants beneath very long-term triple internet leases (NNNs), which presently have a median remaining time period of 41 years. An growing proportion of its leases index rents to inflation (42% this yr, rising to 90% by 2035). Due to that, it generates very steady and rising rental earnings.
VICI Properties has a really robust monetary profile that provides it the pliability to proceed investing in income-producing experiential actual property. Its rising portfolio allows the REIT to extend its dividend. It has raised it for seven straight years (yearly since its formation), at a 7% compound annual charge, nicely above the two% common annual charge of its internet lease friends.
Verizon’s shares have slumped greater than 7% from their latest peak. That has pushed the telecom big’s dividend yield as much as 6.3%. That top-yielding dividend is tremendous secure.
Verizon produces a number of sturdy money circulation as companies and shoppers pay their wi-fi and broadband payments. The corporate earned $36.9 billion in money circulation from operations final yr and $19.8 billion in free money circulation (FCF) after funding capital expenditures, which was greater than sufficient to cowl its dividend outlay of $11.2 billion. Verizon used the remaining extra FCF to strengthen its already rock-solid steadiness sheet.
The corporate is utilizing a few of its monetary flexibility to amass Frontier Communications in a $20 billion all-cash deal to bolster its broadband community. That deal and the continued capital investments to organically develop its fiber and 5G networks put Verizon in place to develop its income and money circulation sooner or later.
That ought to allow the corporate to proceed growing its dividend, which it has achieved for a sector-leading 18 years in a row.
Real Elements Firm has bought off sharply throughout the latest market downdraft, falling over 30%. That stoop pushed the automotive and industrial components distributor’s dividend yield up to three.7%.
There are some issues that tariffs may have a significant affect on the automotive sector, given the amount of components imported into the nation. Whereas this headwind may have an effect on Real Elements’ enterprise, it has weathered adversarial situations earlier than, demonstrating its resilience by growing its dividend for 69 years in a row.
The corporate has a powerful monetary profile to help its high-yielding dividend amid the present market uncertainty. Final yr, Real Elements produced $1.3 billion in money circulation from operations and $684 million in FCF. That was greater than sufficient to cowl the $555 million it paid in dividends.
It has a powerful steadiness sheet with a number of liquidity ($2 billion, together with $480 million of money and equivalents). That offers it a number of monetary flexibility to proceed investing in rising its enterprise and making acquisitions, together with shopping for impartial NAPA Auto Elements shops within the high markets.
These investments ought to assist develop its income and money circulation over the long run, supporting the continued rise in its dividend.
Shares of VICI Properties, Verizon, and Real Elements Firm have dipped throughout the latest inventory market sell-off, which has pushed their dividend yields even greater. Given the sturdiness of their money flows and the power of their monetary profiles, these payouts are very secure. That is why I’ve capitalized on the latest sell-off to purchase much more shares for my retirement account to extend the quantity of their super-safe earnings that I’ll acquire within the years to come back.
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Matt DiLallo has positions in Real Elements, Verizon Communications, and Vici Properties. The Motley Idiot recommends Real Elements, Verizon Communications, and Vici Properties. The Motley Idiot has a disclosure policy.
Buying the Dip: 3 Super Safe High-Yield Dividend Stocks I Added to My Retirement Account During the Stock Market Sell-Off. was initially printed by The Motley Idiot
