Make your money work for you. That’s good advice for any investor. But it’s great advice for income-seeking investors.
Dividend stocks provide an excellent way to put your money to work — especially with certain stocks. Investing $20,000 in each of these five stocks could give you roughly $6,000 in annual income.
Juicy dividends and reliability. AbbVie ( ABBV 2.94% ) offers them both. The big pharma company’s dividend currently yields 3.9%. A $20,000 investment would generate around $780 in annual income. AbbVie is also a Dividend Aristocrat with a long streak of annual dividend increases.
Don’t worry about the impending loss of patent exclusivity in the U.S. for AbbVie’s top-selling drug Humira next year. The company should be in a great position to quickly offset any revenue declines thanks to a strong product lineup.
2. Devon Energy
Devon Energy ( DVN 4.64% ) offers a twist with its dividend. The oil and gas producer pays a fixed dividend plus a variable dividend that’s based on its excess free cash flow. Devon projects a dividend yield in the ballpark of 8%. That’s enough to give you $1,600 in annual income with an initial $20,000 investment.
But can you count on Devon’s dividend in 2022 since part of it is variable? I think so. CEO Rick Muncrief stated in the recent fourth-quarter conference call that the company is in a strong position to grow its free cash flow by more than 70% this year. With the current market dynamics in play for the oil and gas industry, that goal seems quite attainable.
3. Enterprise Products Partners
This strength for oil and gas markets should also work to Enterprise Products Partners‘ ( EPD 2.02% ) advantage. It’s a leading midstream energy company that operates pipelines for transporting and storing crude oil, natural gas, natural gas liquids, and petrochemicals.
An investment of $20,000 would provide $1,550 in annual income based on Enterprise’s current dividend yield of 7.75%. The actual total could be even higher. Enterprise Products Partners has increased its dividend distribution for 23 consecutive years. Look for this impressive streak to continue in 2022.
4. Medical Properties Trust
You can add at least another $1,080 in yearly income by investing $20,000 in Medical Properties Trust ( MPW 3.80% ). The dividend yield for the healthcare-focused real estate investment trust (REIT) currently stands at 5.42%.
Some healthcare REITs have seen their dividend payouts decrease in recent years. MPT, though, boasts nine consecutive years of dividend growth. With its solid portfolio of 440 hospital facilities and 2022 shaping up to be another good year, the chances for another dividend hike appear to be pretty high.
5. Verizon Communications
The annual income from the previous four stocks adds up to at least $5,010. Verizon Communications ( VZ 2.91% ) offers a dividend yield of 4.8%. Buying $20,000 of the telecom stock would add another $960 in income and bring the total to $5,970. Even nominal dividend increases from a couple of these five stocks should bump your yearly income to more than $6,000.
There are also other reasons to buy Verizon stock. In particular, the increased availability of 5G networks across the U.S. should serve as a tremendous tailwind. Look for Verizon to make inroads into the home internet market as a result. The stock is also cheap, with shares trading at only 9.8 times expected earnings.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.