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As enthusiasm for top AI stocks begins to slow amid valuation concerns, investors are looking beyond just a handful of tech stocks to boost their income streams. Dividend stocks are back on the radar of long-term investors in this context. In an August report, S&P Global estimated that aggregate global dividend payments will reach $2.3 trillion in 2024, up 6.7% from last year, with North America leading in dividend growth.
But which safe and reliable dividend stocks should you invest in to increase your passive income or reach financial freedom? To find inspiration and ideas, let’s turn to a success story.
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About nine months ago, an investor shared his detailed dividend income report on /Dividends (a community of about 580,000 income investors on Reddit), saying that he reached a $1,000 monthly income milestone after seven years of investing. He said he could “double” his passive income in just six months by adding to his positions in a few stocks (mentioned later in the article) and was eyeing $50,000 in annual dividend income.
According to the portfolio screenshots he shared on Reddit, he invested about $200,000. This initial investment rose to $281,540 in seven years. Since the investor said he was earning $12,000 annually and $1,000 monthly, his portfolio’s yield is about 4.2%.
The investor was asked about his stock-picking strategy. He said:
“I selected stocks based on profitability, their industry and their growth. I have been investing for seven years.”
Responding to another comment, the Redditor said he focuses on high-yield stocks, their industry and growth.
Based on the portfolio details he shared with fellow investors on Reddit, let’s dig deeper into his portfolio details and see some of the top high-yield dividend stocks he was holding.
Altria
Tobacco products company Altria Group Inc (NYSE:MO) was among the top high-yield dividend stocks in the portfolio of the Redditor making $1,000 per month in dividends. His portfolio screenshots showed he owned about 300 shares of the company. Over the past year, Altria Group Inc (NYSE:MO) has gained about 16%. The company has raised its dividends for about 55 years in a row. MO yields over 8%.
Arbor Realty Trust
Arbor Realty Trust Inc. (NYSE:ABR) is a mortgage REIT with a dividend yield of over 11%. According to the portfolio details he shared publicly, the Redditor owned about 930 shares of the company.
Someone in the comments asked the investor why he owned so many ABR shares. Here was his response (reminder, it was nine months back):
“Because it’s $14 a share and has a good yield. Plus, the market is starting to rebound back pretty well.”
Realty Income
With a dividend yield of over 5% and consistent monthly dividends, Realty Income Corp (NYSE:O) is one of the top dividend stocks for any portfolio. Over the past year, the stock has gained about 21%. The company has increased its dividends every year for the past 30 years. The Redditor had about 519 shares of Realty Income Corp (NYSE:O) in his portfolio.
United Parcel Service
The Redditor making $1,000 a month in dividend income owned 20 shares of United Parcel Service, Inc. (NYSE:UPS). The stock has a dividend yield of about 5% and 15 years of consecutive payout increases. However, it is down 15% over the past year. In July, the company reported second-quarter results that missed Wall Street estimates on both EPS and revenue. However, restarting its $1 billion stock buyback program gave investors something to cheer about.
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JPMorgan Equity Premium Income ETF
The Redditor who doubled his passive income and claimed to earn $1,000 a month had 578 shares of JPMorgan Equity Premium Income ETF (NYSE:JEPI) in his portfolio. JEPI, which has a monthly dividend yield of about 7%, makes money by investing in some of the most notable large-cap U.S. stocks and selling call options. JEPI is ideal for those looking for exposure to defensive stocks. JEPI usually underperforms during bull markets but protects investors against huge losses during bear markets, as most of its portfolio consists of large, defensive equities like Trane Technologies PLC (NYSE:TT), Southern Co (NYSE:SO), Progressive Corp (NYSE:PGR), among many others.
Schwab U.S. Dividend Equity ETF
Schwab U.S. Dividend Equity ETF (NYSE:SCHD) tracks the Dow Jones U.S. Dividend 100 Index and includes some of the safest dividend stocks, such as Home Depot, Coca-Cola, Verizon, Lockheed Martin, Pepsi and AbbVie. The Redditor shared portfolio details showing he had about 100 SCHD shares. The fund has a distribution yield of about 3.34%.
ExxonMobil
Though not a very high-yield dividend stock, Exxon Mobil Corp (NYSE:XOM) has about 40 consecutive years of dividend increases and solid fundamentals that make it an interesting name in the portfolio. The Redditor owned 110 shares of the company.
AbbVie
With a current dividend yield of 3.2%, AbbVie Inc. (NYSE:ABBV) was one of the important dividend stocks in the Redditor portfolio, making $1,000 a month. The screenshots shared by the investor showed his portfolio had 101 company shares. Over the past year, AbbVie shares have gained about 29%.
Wondering if your investments can get you to a $5,000,000 nest egg? Speak to a financial advisor today. SmartAsset’s free tool matches you up with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you.
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This article Dividend Investor Who ‘Doubled’ His Passive Income to $1,000 a Month in Six Months Reveals Portfolio: Top 8 High-Yield Stocks originally appeared on Benzinga.com
