Tips to follow, Publish: 24 Me 16:32
Estimated reading time: 4 minutes
READ MORE ARTICLES ON
Three actions that, in the face of a high-yielding dividend, do not expose you to high-risk or poor growth prospects.
When we talk about a dividend with a high yield, we immediately think that this corresponds to a high risk.
This is the conventional idea that, as Keith Speights writes in The Motley Fool, investors should not hold stocks that give very high dividends for very long.
What is a widespread and conventional thought, is not always valid for everyone: here are three shares with a high dividend that according to Speights probably should never be sold.
Eastern Government Property
Easterly Government Properties is a real estate investment fund (REIT) with a dividend yield of 5.6%, so high, but far from high risk.
As the name suggests, Easterly Government Properties owns properties that it rents to government agencies.
The company specializes in buying property that U.S. federal agencies will use, such as the Veterans Administration, the Federal Bureau of Investigation, and the General Services Administration.
Management companies often claim that much of the company’s cash flow is “backed by the full confidence and credit of the U.S. government.”
The country now led by Biden seems inclined to rent buildings, rather than own even more in the future, due to budget constraints.
Easterly Government Properties should be able to continue to grow and maintain its dividend for a number of years.
Medical Properties Trust
Medical Properties Trust is also a REIT and has a 6.4% dividend yield, showing that the coupon has increased for 10 consecutive years, while other competitors have reduced it.
The company owns about 440 hospitals, operates in 10 countries and plans to invest between $ 1 3 3 billion this year in acquiring additional property.
It is true that many large dividend stocks require investors to take greater risks, alternatively offering anemic growth, but Medical Properties Trust is a clear exception.
Revenue investors have enjoyed Verizon Communications for decades, offering a 5.2% dividend yield, showing that the coupon has increased for 15 consecutive years.
The stock is holding up well this year, considering the general decline in the market.
Most importantly, Verizon Communications could have great potential for future growth.
The increasing adoption of 5G has opened up many opportunities for the company, such as boosting the use of the Internet at home.
From a market perspective, Verizon Communications is by far the largest of the three high-performance stocks we talked about today.
The stock is also the most attractive, with the shares trading at almost nine times the expected earnings.
With its juicy dividends, rising dividend history and solid growth prospects, Verizon Communications is an example of a dividend-buying dividend book.