this S&P 500 Index (SNPINDEX:^GSPC) Offering investors a slim yield of 1.1%. You can do better than using reliable dividend growth stocks such as Enterprise product partners (NYSE:EPD), real estate income (NYSE: O)and Hormel Foods (NYSE: HRL). Here’s a quick look at these three dividend stocks that yield as high as 6%.
Enterprise Products Partners is one of North America’s largest midstream companies. It owns energy infrastructure assets that help transport oil and natural gas around the world. Because the master limited partnership charges fees for the use of its assets, the volume of oil and gas moved through its system is more important than the price of the commodities it moves. This is a relatively low-risk way to add energy exposure to a portfolio because it hedges against oil price risk.
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At the same time, one thing Enterprise is very good at is rewarding income investors who persist. First, the distribution yield is about 6%. But the real story is 27 consecutive annual distribution increases, which is basically the length of time this MLP has been around. Conservatively managed, this high-yield energy stock is a good choice even for risk-averse investors.
With a portfolio of more than 15,500 properties, Realty Income is the largest net lease real estate investment trust (REIT) you can buy. In addition to scale, it offers diversification, with assets spread across North America and Europe. The portfolio focuses primarily on retail properties, but they are generally easy to buy, sell and release as needed. That said, it owns industrial assets and other real estate niches, such as casinos and data centers. At the same time, management has been dabbling in debt financing and building an asset management business.
As with businesses, the most important thing is the dividend. Realty Income has an attractive yield of 4.6%, and its dividend has increased every year for three decades. In fact, the company has trademarked the nickname “Monthly Dividend Company.” Not only does this tell you how frequent dividends are, it also highlights the importance to management and the board of directors of being a reliable dividend stock.
Hormel Foods will be the hardest sell on this list. The company operates in the consumer staples industry and owns a portfolio of industry-leading food brands. Hormel has underperformed its peers recently as it struggles to pass on rising costs to consumers. This limited the company’s profits and caused its stock price to fall sharply. The price decline pushed the dividend yield to a record high of around 4.6%.
