Everyone wants to buy low and sell high. But it’s a lot easier said than done — especially in a down market. The S&P 500 has tumbled 16.5% year to date.
But you don’t need a bull market to make money in stocks. You can also collect dividends.
Instead of trying to catch a stock’s next move up or down, dividend investors can just sit back, relax, and let the dividend checks roll in.
After all, Warren Buffett once said, “Wall Street makes its money on activity. You make your money by doing nothing.
Do not miss
It’s hard to be a buyer of anything in a market where everyone seems to be panic selling. But on the other hand, being contrarian is exactly how many investors have succeeded.
“Be fearful when others are greedy and greedy when others are afraid.”
This is perhaps the most famous quote from Buffett.
With that in mind, here’s a look at three companies that are handing out big dividend checks to investors. Wall Street also sees upside in this trio.
We pay our cell phone and internet bills every month. If you want to break even, consider collecting dividends from companies that provide these services.
AT&T, for example, is one of the largest telecommunications companies in the world. More than 100 million US consumers use its mobile and broadband services. At the same time, the company also serves almost all Fortune 1000 companies with connectivity and smart solutions.
And because wireless and Internet services are necessary to the modern economy, AT&T generates repeat business in all cases.
The company pays a quarterly dividend of 27.75 cents per share, which translates to an annualized yield of 5.9%.
Raymond James analyst Frank Lutan has a “strong buy” rating on AT&T and a $24 price target. Given that AT&T stock is currently trading at around $18.90 a share, the price target suggests a potential upside of 27%.
Income from real estate (O)
Realty Income is a real estate investment trust with a portfolio of over 11,700 properties under long-term leases.
Its top tenants include big names like Walmart, CVS Pharmacy and Walgreens—companies that have survived and thrived through bad and weak business.
In fact, the REIT claims to collect about 43% of its total rent from investment-grade tenants. A diversified, high-quality tenant base allows Realty Income to pay reliable dividends.
Also, while most dividend paying companies follow a quarterly distribution schedule, Realty Income pays its shareholders every month.
The stock is currently yielding 4.6%.
Morgan Stanley analyst Ronald Camdem has an “overweight” rating on Real Estate Income and a price target of $74 — roughly 13% above current levels.
MPLX is not a household name like AT&T. But for serious yield hunters, this is a stock that probably shouldn’t be overlooked.
Headquartered in Findlay, Ohio, MPLX is a master limited partnership formed by Marathon Petroleum to own, manage, develop and acquire intermediate energy infrastructure assets.
The partnership pays quarterly cash distributions of 77.50 cents per unit. With shares trading at $33.73, that translates into a low annual dividend yield of 9.2%.
In the third quarter, MPLX generated $1.26 billion in distributable cash flow, providing 1.58 times coverage for cash distributions for the quarter.
The stock is also up 12.8% year to date, in stark contrast to the S&P 500’s double-digit loss over the same period.
Wells Fargo analyst Michael Bloom sees further upside on the horizon. Blum has an “overweight” rating on MPLX and a $40 price target, about a 19% upside from the stock’s value today.
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This article provides information only and should not be construed as advice. Provided without any warranty.